Central Bank publishes amendment to Resolution 277 aimed at simplifying rules on foreign exchange market transactions

On August 22, 2023, the Central Bank of Brazil (“BC”) published BC Resolution No. 337 (“Resolution 337/2023” or “Resolution”), which amends certain rules relating to the exchange market provided for in BC Resolution No. 277, of December 31, 2022, as amended (“Resolution no. 277/2023”). 

In line with the purpose of modernizing, simplifying and streamlining foreign exchange transactions, as established in the new Foreign Exchange Framework (Law No. 14,286, of December 29, 2021), Resolution No. 337/2023 introduces rules that further simplify the classification of transactions in the foreign exchange market, currently provided for in Resolution No. 277/2023.

The classification codes for foreign exchange transactions were reduced from 174 to 95, while the codes used to identify the foreign exchange transaction group have been extinguished. The foreign exchange transaction group is used to identify, for example, simultaneous foreign exchange transactions, which, as of November 01, 2023, will be replaced by event registrations in the Foreign Capital Reporting System (“SCE” – formerly RDE) of the Central Bank.

Under the new regulation, the transaction amount will now be the only criterion used to determine if a foreign exchange transaction should be classified according to the simplified code list or to the expanded code list.

Thus:

• Foreign exchange transactions exceeding USD 50,000, or its equivalent in other currencies, must be classified according to one of the codes provided for in the expanded code list.
• Foreign exchange transactions involving up to USD 50,000, or its equivalent in other currencies, must be classified according to one of the 10 codes provided for in the simplified code list, regardless of their purpose. This is because, currently, if a certain foreign exchange transaction is subject to registration with the SCE, the expanded code list must be used, regardless of the transaction amount.

Resolution 337/2023 also establishes that third party interest transactions, involving up to BRL 250,000 in a non-resident account constituted in Brazilian reais, can be classified according to the simplified code list.

In addition, the provisions of Resolution No. 277/2023 regarding international payment or transfer services (“eFX”) and transactions for non-resident accounts in Brazilian reais have been improved.

This resolution will enter into force on January 01, 2024, and is available on the BC website.

Our Banking and Finance team is available to provide any further clarifications on the topic that may be necessary.