Provisional Measure No. 2,044-57, Of 26 October 2000

Original Language Title: Medida Provisória nº 2.044-57, de 26 de Outubro de 2000

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Interim Measure No. 2.044-57, of October 26, 2000.

Establishes mechanisms objecting to encouraging the reduction of the presence of the state public sector in banking financial activity, has on the privatization of financial institutions, and gives other arrangements.

THE VICE PRESIDENT OF THE REPUBLIC, in the exercise of the post of CHAIRMAN OF THE REPUBLIC, using the attribution conferring you the art. 62 of the Constitution, adopts the following Interim Measure, with force of law:

Art. 1º The reduction in the presence of the state public sector in banking financial activity will be encouraged by the mechanisms set forth in this Provisional Measure, and by standards downloaded by the National Monetary Council, within the framework of its competence, preferably upon privatization, extinction, or transformation into foster agency, from financial institutions under Federation Unit-share control.

§ 1º The extinction of financial institutions referred to in the caput of this article may be made by means of processes of incorporation, merger, fission or any other form of societal reorganization legally admitted.

§ 2º The National Monetary Council shall regulate the operation of the foment agencies provided for in this article.

§ 3º At the promotion agencies is provided for the provision of guarantees, the use of the institute of fiduciary disposal in warranty and of industrial and commercial credit ballots, and the collection of charges in the molds practiced by the financial institutions.

§ 4º Applies to the agencies of fomenting the provisions of Law No. 6,024 of March 13, 1974.

Art. 2º The adoption of the appropriate measures to each specific case shall give the Union sole discretion, upon request of the respective controller, met with the conditions set out in this Interim Measure.

Art. 3º For the purposes of this Provisional Measure, may the Union, at its sole discretion:

I-acquire control of the financial institution, exclusively for privatizing it or extinguishing it ;

II-fund the extinction or transformation of financial institution into non-financial institution, when carried out by its respective controller, including those submitted to special schemes ;

III-funding the prerequisites for the privatization of the financial institution ;

IV-acquire contractual claims that the financial institution hold against its controller and entities by this controller and refinance the credits thus acquired ;

V-in exceptional character and met to the conditions specified in art. 7º, to partially fund the financial institution's sanitation program, which will necessarily contemplate its capitalization and changes in its management process capable of ensuring its professionalization ;

VI-provide guarantee for funding granted by the Central Bank of Brazil ;

VII-funding the creation of promotion agencies for the Federation Units to conclude financing or refinancing contracts arising from this Provisional Measure.

§ 1º The adoption of the measures provided for in this article shall be preceded by the authorisations which are required in the legislation of the respective Federation Unit

§ 2º The claims that it treats the inciso IV of this article will be those existing on March 31, 1996, plus the contractual interest pro rata die up to the date of the acquisition, in accordance with the financial conditions and charges predicted in the original contracts

§ 3º The refinancing of which deals with the inciso IV of this article will be preceded by the assumption, by the Federation Unit, of the liability debts of the entities controlled by it.

Art. 4º The funding of the prior adjustments required for the privatization of the financial institution, of which it treats the inciso III of the previous article, granted by the Union or the Central Bank of Brazil, restricts itself to cases where there is:

I-legislative authorization of the Federation Unit to:

a) privatization, within a period agreed with the Union, of the respective financial institution

(b) the use of the proceeds from privatisation in the payment of the financing or refinancing of which they treat the incisos III and IV of the previous article or, at the discretion of the Union, of other debt to this one ;

c) when it is the case, the offer in warranty of the shares of its property in the capital of the financial institution to be privatized ; or

II-the dispossession in favor of the Union of shares of the social capital of the financial institution in the form of Decree-Law No. 2,321 of February 25, 1987.

Art. 5º The funding for this Provisional Measure, when granted by the Union, will be paid in until three hundred and sixty monthly and successive instalments, calculated on the basis of the PriceTable, winning the first thirty days after the subscription to the contract and the following in equal day of subsequent months, observed the following conditions:

I-interest calculated and debited monthly, at the minimum rate of six per cent per year, on the previously updated debtor balance ;

II-monetary update calculated and debited monthly, based on the variation in the General Price Index-Internal Availability (IGP-DI), released by the Getúlio Vargas Foundation, or other index that comes to replace it.

§ 1º The corresponding obligations in the service of financing granted by the Union under this Provisional Measure, may be computed jointly with the obligations on refinancing of debts provided for by the Law No. 9,496 of September 11, 1997, specifically for the purposes of applying the maximum commitment of the Real-RLR Net Revenue Revenue referred to in art. 5º of the citation Act.

§ 2º Cessa the application of the provisions of the preceding paragraph if, eighteen months of the date of the signing of the refinancing contract referred to in Law No. 9,496 of 1997, deter the Federation Unit the control of any finance institution

§ 3º The provisions of the preceding paragraph apply only to resources intended for institutions that remain controlled by the Unit of the Federation.

§ 4º For compliance with the provisions of this article, the Union may engage with federal public institution the financial agent services for celebration, monitoring and control of financing contracts or refinancing, whose remuneration will be borne by the Federation Units.

Art. 6º The Central Bank of Brazil, in the financing it grants, for the purposes of which it treats this Provisional Measure, may:

I-rely exclusively on the Union guarantee ;

II-accept, as collateral, securities or rights relating to operations of responsibility of the National Treasury or of entities of the indirect Federal Public Administration.

Single Paragraph. Except in cases where the guarantees that it treats the inciso II of this article are represented by securities of the federal furnished public debt, negotiated at competitive tenders, the nominal value of such guarantees should exceed by at least twenty per cent the guaranteed amount.

Art. 7º In the hypotheses of the incisos III and V of the art. 3º, when there is no shareholder control transfer, or, detaining the Federation Unit most of the social capital in more than one financial institution, to remain some financial institution under its control, the participation of the Union and the Central bank of Brazil shall not be able to exceed fifty per cent of the necessary resources, and the Federation Unit shall adopt, among others, the following measures, involving, together or in isolation, resources in amount at least equivalent to that of Union participation:

I-early discharge of debts of the controller and of entities by this controlled by the financial institution ;

II-assumption of financial institution debts together to third parties, existing on March 31, 1996 and recorded in balance sheet, including liabilities of an actuarial or labor nature ;

III-capitalizing of the financial institution.

Single Paragraph. The funding of which treats the inciso V of the art. 3º percent depends, yet, on favorable manifestation of the Brazilian Central Bank, until December 5, 1997, on the state's proposal for the fulfillment of the provisions of the caput.

Art. 8º Where the participation of the Union is exclusively due to the use of the provision in the inciso IV of the art. 3º, the acquisition of the claims shall be conditional upon the competent legislative authorization for the privatization or extinction of the financial institution or its processing into non-financial institution, of this article.

Single Paragraph. In case the financial institution holder of the credit does not have its shareholder control transferred nor is it extinguished, or transformed into non-financial institution, the refinancing contract should provide for the delivery, by the Federation Unit, of privatizable assets, accepted by the Union, in amount equivalent to, at a minimum, fifty per cent of the total refunded, for purposes of further amortization.

Art. 9º In the cases that they treat art. 7º and the single paragraph of art. 8º, the adoption of the measures authorized in this Provisional Measure will still depend on the decision of the National Monetary Council, which will be given in view of:

I-approval, by the Central Bank of Brazil, of the financial institution's sanitation project that necessarily includes its capitalization and changes in its management system capable of ensuring its professionalization ;

II-Opinion favorable from the Office of the Ministry of Finance's Office of the Ministry of Finance as to the compatibility of the fiscal situation of the controlling State with the effort required by the financial institution's sanitation project.

Art. 10. The Union will pay for the acquisitions of control and credits and grant the financing of which it treats art. 3º with National Treasury securities or upon securitization of bonds, with a bail-out and interest set forth in act of the Minister of State of the Finance, heard the Ministry of Planning, Budget and Management.

Single Paragraph. The National Treasury securities issued pursuant to the caput of this article, when held by financial institutions, may be exchanged for issuance securities of the Central Bank of Brazil, under conditions to be established by the Council National Monetary.

Art. 11. For the purpose of the provisions of paragraph?b? of the inciso I of the art. 4º, the disposal of the financial institution will return to the National Treasury, in up to five business days, the values received in current currency or in federal public debt securities.

Single Paragraph. Securities and credits not understood in the caput of this article, admitted as a means of payment of the disposal of the financial institution, should be replaced, by the disposal, by federal public debt securities, for the purpose of re-passing the National Treasure.

Art. 12. In the hypothesis of the inciso II of the art. 4º, the net result of the privatization of the financial institution shall be used by the Union in the total or partial discharge of the financing or refinancing granted on the basis of this Provisional Measure.

Art. 13. It may be exercised by legal person, at the discretion of the Central Bank of Brazil, the management of financial institutions which have their control acquired in the form of art. 3º, inciso I, as well as those who have their actions misappropriated, as per the provisions of Decree-Law No. 2,321 of 1987.

Art. 14. The financing or refinancing granted on the basis of this Provisional Measure should rely on adequate guarantees or contragaranties, which will necessarily include the linking of own revenue and the resources of which they treat the arts. 155, 157 and 159, inciso I, lyrics?a?, and inciso II, of the Constitution, as well, when it is the case, actions representative of the financial institution's controlling shareholder.

Art. 15. The financing or refinancing contracts for which this Provisional Measure is to be expected to provide, in addition to the guarantees and contragaranties referred to in the previous article:

I-be the National Treasury authorized to draw, in the event of default, against the depository bank accounts of the own revenues and resources of which it treats the previous article, the amount of the unpaid values, with the additions legal and contract ;

II-that payments of them arising will not be subject to limits set out in law, resolution or regulation after their celebration ;

III-which, in the hypothesis of non-transfer of the stock control of the institution or non-processing in non-financial institution, at least fifty per cent of the dividends per it distributed to the controller will be used for the amortization of the financial obligations provided for

Art. 16. At the sole discretion of the Union, goods, rights and shares owned by Federation Unit in dation in payment of the debts contracted in the form of this Provisional Measure may be received.

Single Paragraph. The goods, rights and shares will be accepted at market prices ; when there is no market price, the price will be established on the basis of valuation carried out by three independent consultants hired by the parties.

Art. 17. Occurring impunctuality in the payment of financing or refinancing that it treats this Provisional Measure, the debtor Federation Unit will pay, from the maturity of the obligation, financial charges equivalent to the average cost of caption of the National Treasury, increased from one per cent to the month, incidents over the amount in arrears, without prejudice to the other legal or contractual commisations.

Art. 18. The financing or refinancing contracts arising from this Provisional Measure are to be concluded by June 30, 2000, with the exception of the relative to the inciso V of the art. 3º, whose term of celebration has run out on March 31, 1998.

Single Paragraph. The financing or refinancing pertaining to the inciso I of the art. 3º shall be granted only to the States to conclude, by June 20, 2000, to the Central Bank of Brazil, under the conditions by this determined, management commitment of the financial institution, which shall apply until the date of signature of the respective contract.

Art. 19. Noted the provisions of the following article, the privatization of financial institutions that have their control acquired on the basis of this Provisional Measure, of those who have their shares misappropriated, as per the provisions of Decree-Law No. 2,321, of 1987, and of other financial institutions included in the National Desestatisation Program, will be made upon public offer, assured equal conditions to all competitors.

Art. 20. The privatization or capitalization programmes provided for in this Provisional Measure will be able to contemplate the participation of employees of the financial institutions subject to

Art. 21. The temporary special administration scheme to which they are submitted state financial institutions may be extended, by up to one hundred and eighty days, in addition to the time limits laid down in Decree-Law No. 2,321 of 1987, if the respective Unit of the Federation has firmed, with the Federal Government, protocol for the implementation of the measures provided for in this Provisional Measure, or if the financial institution is in the process of privatization, duly adjusted with the Central Bank of the Brazil.

Single Paragraph. The extension referred to in the caput of this article can be made for up to five hundred and forty days, if the respective Federation Unit has firmed, with the Union or with federal financial institutions, loan contract for sanitation of state financial institution within the framework of the Restructuring Support Programme and the Fiscal Adjustment of States.

Art. 22. In the process of reducing state public sector participation in banking financial activity, the Union will be able to authorize federal financial institutions to take on the liabilities held to the public by financial institutions state.

§ 1º The Union shall ensure to the federal financial institution that it assumes the liabilities to the public the equalization of the existing difference between the value received from the state financial institution as a result of the operation and the value to be paid to the Central Bank of Brazil for the resources obtained in line of specific funding to support the assumed liabilities.

§ 2º The Union's claims arising from the application of the provisions of the preceding paragraph shall be the responsibility of the controller, pursuant to the provisions of the Laws No 6,024 of March 13, 1974, 6,404, December 15, 1976, and 9,447, of March 14, 1997, and may the Union refinance the debt under Law No. 9,496 of 1997.

§ 3º The equalization of which treats § 1º will observe the foreseen in art. 10.

Art. 23. Law No. 9,496 of 1997 passes vigorously with the following changes:

?Art. 1º It shall be the Union, within the framework of the Restructuring Support Programme and the Fiscal Adjustment of States, authorized, until May 31, 2000, to:

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II-take over the loans taken by the States and the Federal District together with the Federal Economic Box, with ampairing in Resolution 70 of December 5, 1995, of the Federal Senate, as well as, at the sole discretion of the Executive Power Federal, other debts whose refinancing by the Union, under this Act, has been authorized by the Federal Senate until June 30, 1999 ;

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IV-take on the furnished public debt issued by States and the Federal District, after December 13, 1995, for payment of judicial precepts, in the terms of art. 33 of the Act of Transitional Constitutional Provisions ;

V-refinance the claims arising from the assumption referred to in the incisos I and IV, together with credits titled by the Union against the Units of the Federation, these at the sole discretion of the Ministry of Finance ;

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§ 2º It will not be covered by the assumption to which the incisos I, II and IV refer, nor by the refinancing to which the inciso V refers:

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d) the furnished debt in power of the issuer itself, even if by means of liquidity background, or that has been placed on the market after December 31, 1998.

§ 3º The operations authorized in this article shall bind to the establishment, by the Units of the Federation, of Restructuring and Fiscal Adjustment Program, agreed with the Federal Government.

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§ 5º Atendides to the requirements of the preceding paragraph, may the Minister of State for Finance, to enable the effective assumption referred to in the inciso I of this article, to authorize the conclusion of contracts of promise of assumption of the referred to obligations.

§ 6º The credit corresponding to the assumption referred to in inciso II, in the portion on contingency funds of state banks, constituted under the scope of the state public sector presence reduction programme in the activity bank financial year, may, at the discretion of the Minister of State of the Finance, be incorporated into the debtor balance of debt restructuring contracts concluded under this Act, when the use of the resources deposited in the respective funds.

§ 7º The eventual difference between the assumption referred to in the preceding paragraph and the balance shown in the respective funds may, at the discretion of the Minister of State of the Farm, be incorporated, in up to twelve months, with remuneration up to date of incorporation by the change in the average rate adjusted in the daily financing ascertained in the Special Liquidation and Custody System (SELIC) released by the Central Bank of Brazil, to the debtor balance of debt restructuring contracts, concluded under the terms of this Act.? (NR)

?Art. 3º .....................................................................................................................................

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§ 1º To ascertain the refunded value relating to the furnished debt, with the exception of the one referred to in the inciso IV of the art. 1º, the basic financial conditions set out in the caput will be able to retroact by September 30, 1997.

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§ 6º The non-establishment of the Program within the period fixed in the refinancing contracts, or the disfulfilment of the targets and commitments set out therein, will entail, while not established the Program or during the period on which the discompliance, as the case may be, without prejudice to the other compensation paced in the refinancing contracts, the replacement of the financial burden mentioned in this article by the average cost of caption of the federal furnished debt, plus a per cent, and the elevation in four percentage points of the established commitment based on art. 5º.

§ 7º The application of the provisions of the preceding paragraph with regard to the disfulfilment of the targets and commitments set out in the Programme, may be reviewed by the Minister of State for Finance, in the view of justification substantiated by the State.

§ 8º The amount for benefits accrued between the date of signing of the refinancing contract and that of its effectiveness may be parceled in up to thirty six monthly and consecutive instalments, by the Amortization System Constant-SAC, with charges equivalent to the SELIC fee, by winning the first on the first maturity date of the benefits of the refinancing contract that occurs after the effectiveness of the contract and the other ones, on the same subsequent dates, limited to last instalment on November 30, 2002.

§ 9º The benefits referred to in the preceding paragraph are not subject to the commitment limit to which the art is referred. 5º.

§ 10. The possibility of parceliing that it treats § 8º only applies to contracts that have been signed up to December 31, 1998.? (NR)

?Art. 6º For the purposes of application of the limit set in art. 5º, may be deducted from the limit ascertained the expenditure effectively held in the previous month by the refunded, corresponding to the services of the following obligations:

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VII-debts of which deal with incisos I and II, of indirect Administration entities, which are formally taken over by the State until December 31, 1997 ;

VIII-from state financial institutions to the Central Bank of Brazil, which are formally taken over by the state until July 15, 1998.

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§ 3º The commitment limit set in the form of this article, starting from 1º June 1999, will be maintained until the values posterated in the form of the previous paragraph are fully settled.

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?Art. 7º-A. Payment of the remaining debtor balance on November 30, 1998 in the graphical accounts opened under the terms of the refinancing contracts concluded upon the ampairing of this Act, at the discretion of the Ministry of Finance, may be extended to November 30 of 2000, by staying the Union authorized, in this act, to charge, on that parcel, charges equivalent to the average cost of caption of the domestic furnished debt of the Federal Government.

§ 1º At the discretion of the Ministry of Finance, the remaining debtor balance of the graphical account of which it treats the caput may be parceled in up to thirty-six monthly and consecutive instalments, by the Constant Amortization System- SAC, with charges equivalent to the SELIC fee, by winning the first on the first due date of the benefits of the refinancing contract occurring after formalization of the bracing provided for in this paragraph and the other ones, on the dates subsequent, limited the last instalment on November 30, 2002.

§ 2º The resources generated by the disposal of the goods, rights and shares delivered by the Units of the Federation to the Union for the purposes of extraordinary amortization of the refinancing contracts concluded in the form of this Act will be, compulsorily, intended for the amortization or settlement of the parcelain provided for in the preceding paragraph.

§ 3º The benefits referred to in § 1º are not subject to the commitment limit to which the art is referred. 5º.

§ 4º The provisions of this article do not preclude sanctions arising from the disfulfillment of any other contractually anticipated obligations.? (NR)

?Art. 7º-B. It applies to the value corresponding to the extraordinary amortization (graphic account) generated on the occasion of the effectiveness of the contract on the refinancing of the debt referred to in the inciso IV of the art. 1º, observed the percentage and conditions already set out in the refinancing contracts concluded with each Federation Unit, the provisions of the previous article.? (NR)

Single Paragraph. The financial effects arising from the provisions of § 3º of the art. 6º of Law No. 9,496, 1997, with the essay given by this Provisional Measure, will be able to retroact up to 1º June 1999.

Art. 24. It is the Union authorized to assume the burden arising from the reduction in charges provided for in the contracts, which it secured, concluded by October 30, 1997 under the Restructuring Support Programme and the Fiscal Adjustment of States.

Art. 25. It is the Union authorized to equalize the cumulative gap, since October 30, 1997, between the average caption costs used in the composition of the financial charges adjusted in the contracts concluded, by the States, with institutions federal public financial, within the framework of the Restructuring Support Program and the Fiscal Adjustment of States, authorized by the National Monetary Council, and the average cost of caption of the contracting institution in the reference month.

Art. 26. It is the Union authorized to hand over resources to states, their Municipalities, and the Federal District, respected as a limit for transfers the balance of budget allocations specifically intended for purpose.

Single Paragraph. Act of the State Ministers of the Finance and Planning, Budget and Management will establish the limits, criteria, deadlines and the other conditions for the delivery of the resources to States, their Municipalities, and the Federal District, and must be firmed in advance the respective term of accession.

Art. 27. Is it extended, by December 30, 1999, to the time limit laid down in paragraph?b? of the inciso IV of the art. 3º of Law No. 9,846 of October 26, 1999.

Art. 28. The Executive Power shall regulate the provisions of this Provisional Measure.

Art. 29. The acts practiced on the basis of the Provisional Measure No. 2.044-56, of September 26, 2000, shall be convalidated.

Art. 30. This Provisional Measure comes into force on the date of its publication.

Brasilia, October 26, 2000 ; 179º of Independence and 112º of the Republic.

milestone antonio of massiel olive tree

Amaury Guilherme Bier

Martus Tavares


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