Extension of Urgent Measures Applied to Rural Credit Transactions Due to COVID-19

On July 30, 2020, the National Monetary Council (“CMN”) approved Resolution 4,840 (“Resolution 4,840/2020”) and Resolution 4,843 (“Resolution 4,843/2020”) with the objective of extending the term of the urgent measures applied to the rural credit transactions as a result of Covid-19.

Resolution 4,840/2020 extends up to December 15, 2020 the maturity of the installments due or falling due for the period January 1, 2020 to December 14, 2020, of rural credit transactions for expenditures and investments purposes contracted by rural producers’ borrowers whose activities were adversely impacted by Covid-19. Additionally, such rule extends the term of the state of emergency that is in place in municipalities affected by drought.

Resolution 4,843/2020 amends the Rural Credit Guide (Manual de Crédito Rural – “MCR”) to extend the Covid-19 emergency measures adopted on the granting, control and inspection proceedings related to rural credit transactions, such as:

• for transactions contracted between March 1 and December 31, 2020, waives the requirement for presentation of the documentation registered with the registry office to evidence the contractual relationship between the landlord and the tenant beneficiary of the rural credit, provided that the landlord informs the financial institution, by electronic means, of the existence of such relationship;

• extends the term for presentation of the document evidencing the acquisition of supplies and the payment of workers as mentioned in item 2-5-11-“a” of the MCR, if requested by the financial institution up to December 31, 2020, which can be carried out by the borrower up to January 31, 2021;

• between April 30, 2020 and December 31, 2020, allows for the granting of financing targeted at cattle raising and buffalo raising without the presentation of the Animal Transit Permit and the sanitary control form or equivalent document, which must be delivered to the financial institution by January 31, 2021;

• up to December 31, 2020, waives the local inspection referred to in item 2-8-8 of the MCR;

• up to December 31, 2020, for the extension and rescheduling of reimbursements of credit transactions for rural expenditures, waives the requirement for presentation to the financial institution of the document evidencing the maintenance of the product, when its remittance by electronic means is not possible, which must be kept for future presentation, when requested;

• up to December 31, 2020, allows for the simplified renewal of the agricultural and livestock expenditures transactions.

Demarest’s Banking and Finance team is closely monitoring these and other measures and is ready to assist you in any matters regarding this topic. For more information, please feel free to contact us.