New Legal Framework for the Brazilian Exchange Market – Law No. 14.286 – is approved

The December 30, 2021 edition of the Official Gazette of the Federal Administration published Law No. 14.286, enacted by the National Congress and sanctioned by the President, which provides for the Brazilian exchange market, the Brazilian capital abroad, the foreign capital in Brazil, and the provision of information to the Brazilian Central Bank (“BCB”), with the purpose of compiling official macroeconomic statistics. However, the new foreign exchange legal framework will only come into force and generate effects as of December 30, 2022.

The new law — originated from Legislative Bill No. 5.387/2019 — (i) consolidates over than 40 regulations that have provided, since 1920, for aspects related to these topics (this consolidation offers enhanced legal security for the market, since it comprises recent technological innovations and supports the needs of the Brazilian economy); (ii) conforms the Brazilian legislation with operational needs arising from global production chains, which facilitates foreign trade and the flow of investment resources; and (iii) promotes the foreign investments in Brazil, as well as the Brazilian investments abroad, proportionally to the business amounts and risks involved. These conditions are literally recognized by the BCB itself.


The BCB’s Purview. As per the new law the BCB shall be in charge of: (i) regulating the foreign exchange market and its operations and dispose about the types and characteristics of products, forms, limits, rates, terms and other conditions; (ii) providing for the constitution, operation, transfer of control, corporate reorganization and the cancellation of institutions authorized to operate in the foreign exchange market, including when they involve the non-residents participation; (iii) authorizing the possession and the exercise in the governance of institutions authorized to operate in the exchange market; (iv) supervising the institutions authorized to operate in the exchange market; (v) regulating the accounts in Brazilian currency held by non-residents, including as to the requirements of their opening and movement; (vi) regulating foreign currency accounts in Brazil, including the requirements and procedures for their opening and operation; (vii) maintaining deposit accounts and clearing, settlement and custody accounts, in Brazilian and in foreign currency, held by international organizations, in accordance with the limits, terms, forms and conditions established in the regulation to be issued by the BCB; and (viii) maintaining the deposit accounts and the clearing, settlement and custody accounts, in Brazilian currency, held by foreign central banks or by institutions domiciled or with headquarters abroad that provide clearing, settlement and custody services in the international market, according to the limits, terms, forms and conditions established in the regulation to be issued by the BCB.

Institutions Authorized to Operate in the Exchange Market. Only institutions authorized by the BCB to operate in this market can perform the related operations . Authorized institutions include the financial institutions as well as the payment institutions (in accordance with BCB Resolution No. 137/2021), all of them abide by the limits settled in the regulations.

Control Measures. Additionally, the authorized institutions must adopt measures and controls aiming at avoiding the execution of operations in the exchange market that constitute illegal acts, including the crimes of money laundering and financing to terrorism, under the terms of Law No. 9.613/1998 and in accordance with the regulation to be issued by BCB.

Brazilian Currency Accounts held by Non-Residents. Accounts denominated in Brazilian currency will be treated under the same rules applicable to accounts in real held by residents, notwithstanding the requirements and procedures that the BCB may establish, including with respect to payment orders in Brazilian currency to other countries.

Orders for Payment in Brazilian Currency Foreign Countries. Based on the terms of Article 6 of the new law, the authorized institutions will be able, in conformity to the regulation to be issued by the BCB, to execute payment orders in Brazilian currency received from abroad or sent overseas, by using the Brazilian currency held in local banks that are owned by institutions domiciled or headquartered abroad and that are subordinated to the financial regulation and supervision in their country of origin. This provision contributes to the greater international use of the Brazilian currency, facilitating its use in cross-border financial transactions.

Provision of Information for Statistical Purposes. The authority of the BCB to request from residents the mandatory information to compile data for official macroeconomic statistical purposes is now strengthened. This task will be carried out by the BCB and its agents under strict secrecy, maintaining safeguarded the individual information obtained, being permitted its utilization exclusively for statistical purposes and for studies and research, without the holder’s identification.

Private Set-Off of Credits. The new law now authorizes private credit set-off, in cases contemplated in the BCB’s regulation. This new rule eliminates the former general prohibition of private clearing, as currently contemplated by Article 10 of Decree Law No. 9.025/1946.

Payment in Foreign Currency. A significant new provision contemplated by the new law refers to the performance of payment of enforceable obligations in Brazilian territory, in foreign currency, under the following situations: (i) contracts entered by exporters in which the counterparty is a concessionaire, permissionaire, authorizer or lessee in the infrastructure sectors, (ii) relative to scenarios contemplated in the regulation of the National Monetary Council (“CMN”), when its use can mitigate foreign exchange risk or increase the efficiency of the business, and (iii) others equally contemplated in the Brazilian legislation. It is relevant to note that the stipulation of payment in foreign currency was already allowed under the terms of Decree-Law 857 dated 1969 and in other rules, in relation to the following situations: (i) contracts and securities related to foreign trade of goods and services, their financing and guarantees, (ii) obligations in which creditor or debtor is a non-resident, including those arising from credit or leasing transactions, except in leases of real estate located in the national territory, (iii) leasing agreements between residents, based on the raising of funds abroad, (iv) assignment, transfer, delegation, assumption or modification of the above obligations, including if the parties are residents, (v) purchase and sale of foreign currency, and (vi) indirect export, under the terms of Law No. 9.529/1997.

Limit on Carrying Amounts in Cash. The new law also established the amount of US$10,000 (ten thousand U.S. dollars) or its equivalent in other currencies as the limit above which a person entering or leaving Brazil must declare carrying cash. This limit, currently, is R$10.000.00 (ten thousand reais).

Loans Abroad with Funds Raised in Brazil. The new law, as of its effectiveness, will allow financial institutions headquartered in Brazil to carry out loan operations abroad with funds raised in Brazil, observing the regulatory and prudential requirements, thus eliminating the prohibition that has been observed by the market since the 1960’s, expressed in the terms of BCB Circular No. 24.

Purchase and Sale of Foreign Currency in Cash Between Individuals in Brazil. According to article 19 of the new law, the rules of exchange market provided by the referred law will not be applicable to the operations of purchase and sale of foreign currency in cash in the value of up to US$ 500.00 (five hundred US dollars) or its equivalent in other currencies, performed in Brazil, on an occasional and nonprofessional basis, between individuals. In other words, as of the entry into force of Law No. 14.286, individuals in Brazil may trade in foreign currency up to the aforementioned limit. This new rule legitimizes operations that, until now, have been considered irregular in the local market.


As soon as the new law comes into force, the provisions of paragraph 2 of Article 1 of Law No. 11.371/2006 will be revoked, so that the restrictions for Brazilian exporters to freely use their funds in foreign currency related to the receipt of exports held abroad will be eliminated.

The new law delegates to the Brazilian monetary authorities the necessary competence to establish more specific regulations about several relevant aspects of the exchange market. Thus, one should observe, throughout this and the coming years, the enactment of important innovations in the Brazilian foreign exchange regulatory scenario. In any event, it is certain that the general rules brought about by the new framework align the Brazilian exchange market with the finest international practices and, as a result, give rise to a more efficient local market, with a positive impact towards the attraction of  foreign investment.