RESOLUTION 2309 OF AUGUST 28, 1996

 

Disciplines and consolidates the rules applicable to leasing transactions.

 

The Central Bank of Brazil (BACEN); in accordance with section 9 of Law 4595, of December 31, 1964, informs that the National Monetary Board (CMN), during a session held on August 28, 1996, based on Law 6099, of September 12, 1974 (with the alterations set forth in Law 7132, of October 26, 2993) has decided:

 

Section 1 – To approve the attached regulations, applicable to operating lease transactions; the lease transactions in general to be executed with individuals; also consolidating the regulations applicable to financial lease transactions in general.

 

Section 2 – BACEN is authorized to take the necessary measures and issue the rules it might consider necessary to enforce the provisions set forth in this Resolution.

 

Section 3 – This Resolution will come into force on the date of its publication in the Official Gazette.

 

Section 4 – Resolutions 980/84, 1452/88, 1474/88, 1681/90, 1686/90, 1769/90; section 2 of Resolution 2276/96 and BACEN’s Directives (Circulares) 903/84, 2064/91 and section 2 of BACEN’s Directive (Circular) 2706/96, shall be deemed as revoked at the time this Resolution comes into force.

 

ANNEX TO RESOLUTION 2309

CHAPTER I

 

Section 1 – Leasing Transactions, as defined in Law 6099 of September 12, 1974 (with alterations made by Law 7132 of October 26, 1983), can only be held and offered by (i) legal entities having such activity as their main business, purpose; (ii) multiple banks authorized to hold and offer lease transactions; and (iii) those financial institutions which, in accordance with section 13 of this Resolution, are duly authorized to execute sale and lease back transactions either with the seller of the asset as lessee or legal entities affiliated or interdependent to the former.

 

Sole Paragraph – The transactions foreseen in this section may be financial or operating.

 

Section 2 – To hold and offer the transactions provided in this Resolution, leasing companies and the financial institutions referred to in the previous section shall organize and maintain a technical department duly structured and supervised by one of its respective executive officers.

 

Sole Paragraph – Those leasing companies and financial institutions shall submit the name of the respective executive officer in charge of the leasing transactions department to BACEN’s representative body in the jurisdiction.

 

CHAPTER II

 

Section 3 – Incorporation and business operation of legal entities having to hold and offer leasing transactions as their main business purposes, known as leasing companies, depend on BACEN’s authorization.

 

Section 4 – Leasing companies shall be organized as corporations, being submitted, notwithstanding the eventual peculiarities, to the same requirements applicable to incorporation and operation of financial institutions in general, set forth in Law 4595/64, and otherwise related legislation applicable to the National Finance System. The expression “Arrendamento Mercantil”, shall be part of such Companies’ trade names.

 

Sole Paragraph – The expression “Arrendamento Mercantil” in the trade name is restricted to the companies referred to in this section.

 

CHAPTER III

 

Section 5 – A lease transaction shall be considered as a financial lease, when:

 

I –        the installments and other payments to be made by the lessee in accordance with the agreement are usually sufficient to allow lessor to recover the leased asset’s purchase price along with lessor’s fees during the term of the lease;

II -       costs and expenses related to maintenance, technical assistance/support and other services related to the operation of the leased asset are under lessee’s responsibility; and

III -      the price for the purchase option is freely stipulated by the parties, the use of the fair market value is also authorized.

 

Section 6 – A lease transaction shall be considered as an operating lease, when:

 

I -        the installments to be paid by lessee cover the cost of the lease and the services related to delivery of the asset to lessee. The present value of the total amount of such installments shall not exceed 90% of the asset’s purchase price paid by lessor.

II -       the term of the lease is shorter than 75% of the asset’s useful life.

III -      the price for the purchase option is the fair market value of the asset.

IV -      there is no stipulation providing for payment of residual value (VRG).

 

Paragraph 1 - The transactions referred to in this section are restricted to multiple banks authorized to hold and offer lease transactions and to leasing companies.

 

Paragraph 2 – In the calculation of the present value of the payments to be made by lessee, the applicable discount rates shall be equivalent to those rates used in the calculations of the lease installments in the respective agreement.

 

Paragraph 3 – Costs and expenses related to maintenance, technical assistance/support and other services related to the operation of the leased asset are either under lessor or lessee’s responsibility.

 

CHAPTER IV

 

Section 7 - Lease transactions shall be executed in writing, by means of a public or private deed, which shall contain, at least, the following provisions:

 

I -        description of the leased assets, with all details necessary for perfect identification of such assets.

II -       term of the lease.

III -      the amount of the lease installments or the means for calculation of it, along with a criterion for such installments’ adjustments.

IV -      means and schedule of lease installments’ settlement, distance between maturity dates shall not exceed 6 months, unless in the case of transactions executed for the benefit of rural activities, when distance between maturity dates shall not exceed 1 year.

V -       lessee’s choices to purchase or return the asset, or renew the lease and respective conditions to be met by lessee in every case.

VI -      lessee’s right to purchase the leased assets, by paying the price already stipulated in the agreement or the amount resulting from the criterion stipulated in the agreement for the appraisal/calculation of the purchase option’s price;

VII -    costs and additional expenses, including expenses related to technical assistance/support, maintenance and other services pertaining to leased asset’s operation, being also admitted, in case of financial leases:

(a)        a provision stipulating lessee’s obligation to pay the guaranteed residual value (VRG) at any moment during the course of the agreement, such payment not being considered as an anticipation of lessee’s purchase option;

(b)       the adjustment of the amount stipulated as the purchase option and the amount pertaining to the guaranteed residual value (VRG).

VIII -   conditions for the eventual substitution of the leased assets, including in case of loss, for other similar but better suited to fulfill lessee’s needs. Such substitutions shall be carried out through an amendment to the original lease agreement.

IX -      other liabilities/responsibilities agreed on by parties, resulting from:

(a)               undue or improper use of the leased assets.

(b)               insurance coverage.

(c)               loss and damages inflicted to third parties resulting from the use of the leased assets.

(d)               liabilities resulting form malfunctions and/or inadequacies of the leased assets.

X -       Lessor’s right to inspect the leased assets and to request from lessee the necessary action to keep the assets in good condition.

XI -      lessee’s liabilities in case of:

 

 

(i)        default in the timely settlement of its obligations, being the fine on late payments limited to 2% of the amounts in arrears.

(ii)       destruction, demise or loss of the leased assets.

XII -    Lessee’s right to transfer to third parties in the Brazilian territory, so long as lessor expressly consents, its rights and obligations resulting from the agreement, with or without recourse.

 

Section 8 – The agreements shall provide for the following minimum terms of duration:

 

I -        In case of financial leases:

 

(a)        2 years, between the date of lessee’s formal acceptance of the delivered assets and the maturity date of the last lease installment, in case of leased assets with a useful life equal to or shorter than 5 years;

(b)               3 years, counted in a similar manner to (a) above, in case of other assets.

 

II -       90 days, in case of operating leases.

 

Section 9 – Lease agreements in which the respective funding directly or indirectly results from cross border loans or similar shall contain an exchange rate variation clause.

 

Section 10 – A lease transaction shall be regarded as a purchase and sale transaction in case the purchase option is enforced prior to the pertinent minimum term set forth in section 8 above.

 

CHAPTER V

 

Section 11 – Assets, manufactured in Brazil or abroad, and real estate may be leased to lessee, so long as the lease is for the benefit of lessee and the asset specifications are laid down by lessee.

 

Section 12 – Lease transactions with individuals and legal entities as lessees are expressly permitted.

 

Section 13 – Lease transactions in which seller of the leased asset is the lessee, or in which companies affiliated or interdependent to the seller of the asset are lessees shall comply with the peculiarities applicable to financial leases, also being submitted to the requirements foreseen in this Resolution.

 

Paragraph 1 – The above referred transactions can only be executed with legal entities, as lessees.

 

Paragraph 2 – Multiple banks authorized to deal with investments, development financing and real estate financing, and, also, investment banks, development banks, savings banks and real estate financing companies are also authorized to hold and offer the transactions referred to in this section.

 

Section 14 – In case of recovery or repossession of the leased assets, leasing entities are authorized to:

 

I -        keep the assets in their respective fixed assets’ accounts for a maximum term of 2 years;

II -       sell or execute a new leasing transaction involving such assets, with third parties.

 

Sole paragraph – The provisions set forth in this section are also applicable to those assets that were transferred to the leasing entity as a means of settlement of other obligations (“datio pro soluto”).

 

Section 15 – Multiple banks authorized to hold and offer lease transactions and leasing companies may execute, as lessees, cross border lease transactions with individuals or legal entities domiciled abroad, for the strict purpose of executing sublease transactions in Brazil with legal entities as lessees.

 

Sole paragraph – The lease transaction referred to in this section shall be registered with BACEN.

 

Section 16 – Multiple banks authorized to hold and offer lease transactions and leasing companies may acquire, on the domestic market, rights and obligations resulting from cross border leases, for the strict purpose of subsequent execution of sublease transactions, in accordance with the previous section.

 

Section 17 – Sublease transactions, in which the foreign lessor is a direct or indirect affiliated company or and interdependent company to the sublessee domiciled in Brazil, according to definitions set forth in section 27 below, are strictly forbidden.

 

Section 18 – Multiple bank authorized to hold and offer lease transactions and leasing companies, whenever acting as sublessor in a sublease transaction, shall execute with the sublessees domiciled in Brazil financial sublease agreements, in accordance with the requirements applicable to financial lease transactions, transferring to sublessees any and all costs, taxes, fees, brokerage fees and other expenses related to the obtaining of the leased asset as well as the other conditions foreseen in the cross border lease transaction executed with the foreign lessor, along with sublessor’s fees, including those fees related to eventual acquisition of rights and obligations in agreements, being such expenses incorporated in the cost of the leased asset.

 

CHAPTER VII

 

Section 19 – Leasing companies may employ in their business not only their own resources but also funding resulting from:

 

I -        International loans;

II –      Loans and other financing facilities offered by domestic financial institutions including those indexed in foreign currency (Law 4131-Res. 63);

III -      governmental financing programs offered by public financial institutions;

IV -      debentures and commercial papers (promissory notes);

V -       assignment of lease agreements and lease receivables;

VI -      inter-bank deposits (CD’s), according to the applicable legislation;

VII -    other means of fund-raising which are authorized by BACEN.

 

Section 20 – Leasing companies and other financial institutions authorized to hold and offer lease transactions may execute, as borrowers, international loans with foreign entities for the following purposes:

 

I -        raise funds for the purchase of leased assets;

II -       purchase, as assignees, lease receivables indexed in foreign currency resulting from lease agreements;

III -      purchase, as assignees, lease agreements indexed in foreign currency, provided the restrictions stipulated in Section 22 below are followed.

 

Section 21 – Leasing companies may raise funds from financial institutions affiliated or interdependent to the former, through loans, and other financing facilities, so long as the fees and interest rates stipulated in such transactions are equivalent to those usually charged in transactions executed with third parties.

 

Section 22 – Transactions providing for the assignment and purchase of lease agreements, on the domestic market, except for those referred to in Section 13 above, are restricted to multiple banks authorized to hold and offer lease transactions and leasing companies.

 

Section 23 – The payment for the acquisition of lease agreements in which (i) the leased assets were purchased with funds raised abroad or (ii) the lease receivables are indexed in foreign currency, must be made with funds raised abroad. Same is applicable in case of acquisition of lease receivable indexed in foreign currency.

 

Section 24 – Leasing companies may offer, as a collateral of the loans (domestic or international) executed by the former as borrowers, a pledge of lease receivables.

 

Section 25 – The assignment of lease agreements, as well as lease receivables, to entities domiciled abroad shall be previously approved by BACEN.

 

Section 26 – Multiple banks authorized to hold and offer investment or development transactions, as well as investment banks may use funding raised abroad in accordance with CMN’s Resolution 63, of August 21, 1967, in the lease transactions referred to in section 13 above.

 

Paragraph 1 – Lessees in such lease transaction shall be legal entities.

 

Paragraph 2 – The portion of the foreign funding mentioned above, which is already recovered through the payment of the referred lease installments may be used again in other lease transactions, in other loans or in other investments duly authorized and available to such type of funding.

 

Paragraph 3 – The minimum terms set forth in Section 8-I above provided, the transactions referred to in this section shall match the term of the foreign loan, and the monies shall be maintained in the Brazilian territory according to conditions and terms approved by BACEN at the time of the remittance to Brazil of such funds was authorized.

 

CHAPTER VIII

 

Section 27 - For the purpose of Section 2, paragraph 1, of Law 6099, of September l2, 1974 and this Resolution, a legal entity (or as the case may be, an individual) shall be deemed as affiliated or independent, in the following events:

 

I –        the lessor holds, directly or indirectly, 10% or more of referred company’s (stock);

II –      lessor’s executive officers or board members, or respective husbands and wives or relatives (up to 2nd degree of relationship) hold, jointly or separately, directly or indirectly, 10% or more of the referred company’s stock;

III –     lessor’s shareholders holding 10% or more of lessee’s shares, also hold, directly or indirectly, 10% or more of the company’s stock;

IV –     to hold, directly or indirectly, 10% or more of lessee’s stock;

V –      the Company’s executive officers, members of the board, or respective husbands or wives or relatives (up to 2nd degree of relationship) hold, jointly or separately, directly or indirectly, 10% or more of lessor’s stock;

VI –     the referred company’s shareholders, or partners holding 10% or more of the former’s stock also hold, directly or indirectly, 10% or more of lessor’s stock;

VII -    in case the referred company’s administrators are, in full or in part, also administrators of the lessor.

 

CHAPTER IX

 

Section 28 – Leasing companies and the financial institutions referred to in section 13 above, cannot execute lease transactions with:

 

I -        individuals or legal entities regarded as affiliated or independent to the companies mentioned above;

II –      their executive officers, members of the board of directors, their respective husbands and wives and relatives (up to 2nd degree of relationship);

III –     the manufacturer of the asset.

 

Section 29 – Leasing companies cannot execute loans, as lenders, with individuals and non-financial entities.

 

CHAPTER X

 

Section 30 – BACEN may stipulate criteria for amortization of lessee’s obligation in lease agreements, taking into consideration the best possible compliance with the minimum terms set forth in Section 8 above.

 

Section 31 – Leasing companies’ available resources, when not maintained in cash, may be freely invested on the market, so long as the limits and other regulations applicable to each type of investment are complied with.

 

Section 32 - Leasing companies must comply with the legislation applicable to financial institutions in general, including BACEN prerogatives to grant authorizations set forth in Section 10-X of Law 4595/64 and to approve leasing companies’ officers, members of the board of directors and/or other consulting bodies and/or statutory audit committees or similar, in accordance with referred legislation and other subsequent rules.

 

Section 33 – Transactions that do not comply with this Resolution’s dispositions shall not be regarded as lease transactions.