Brazilian economic authorities Friday announced they had received an invitation from the Organization for Economic Cooperation and Development (OECD) Council to abide by both the Capital Movements Liberalization Code and the Intangible Current Operations Liberalization Code.
According to Brazil's Central Bank, the Code for the Liberalization of Capital Movements refers to standards for normative acts on international financial flows, including payments, transfers, loans, investments, and the purchase and sale of foreign currency, it was explained.
On the other hand, the Code for the Liberalization of Intangible Current Transactions has to do with international consulting, legal, and architectural services.
The two liberalization codes consolidate recommendations resulting from decades of studies and are based on principles of non-discrimination and transparency, among others, Brazil's Central Bank highlighted.
Brazil has been working consistently on the convergence of normative acts to the good practices recommended by the codes, it went on. It also pointed out that a country's adherence to these codes represents a better understanding of our regulatory framework, lower cost of adaptation to the particularities of the country, and greater perception of legal security in international operations.
The Economy Ministry also said in a statement that all OECD members observe these two codes. Since 2012, non-member countries may also adhere.
Brazil started its process to join the OECD in 2017 and the new invitation would make it the first non-member nation to follow the two codes.
”For convergence to the provisions of the codes, legislative and regulatory actions have been implemented, contemplating: the elimination of limits on foreign investment in air transport; the elimination of reciprocity requirements in the area of insurance; the elimination of the need for a presidential decree for the establishment of branches of foreign financial institutions; the delegation of competence to the Ministry of Economy to authorize the operation of foreign companies in Brazil; the increase of cession limits for occasional reinsurers; the enactment of the Foreign Exchange and International Capital Law (LCCI) and the Decree on the Tax on Financial Transactions (IOF) for Foreign Exchange, which established the gradual reduction of rates down to zero, in a staggered manner, the ministry detailed.
The ministry also pointed out that Brazil's compliance with these codes is aligned with the elimination of barriers to international flows of trade and investment and the better functioning of the capital market.” (Source: Agencia Brasil)