How to Export to Brazil - Sprint Lazio

Brazil – Ministry of External Relations
In the case of payment in advance, the currency exchange contract will be made with
the banking system without limits to the sums, in which case the financial risk is
assumed by the Brazilian importer if the goods are not received.
When the payment is made through documentary credit for payment up-front
or in instalments, the Brazilian banks will only deliver the original documents
to the importer when the latter has formalized the respective currency exchange
contract, thus converting reais into foreign currency to make the payment to
the exporter.
If the mode of payment is a letter of credit issued by the Brazilian bank, the payment
is guaranteed to the foreign exporter, provided the documentation presented is strictly
in compliance with the credit demand. In this case, the currency exchange contract
will become a financial settlement between the importer and the bank that issued the
letter of credit.
It is important to highlight the existence of the Reciprocal Lending Agreement – CCR,
a system agreed on by the central bank of Latin American countries, employed mainly
in letter of credit operations, which offers greater guarantees to exporters.
Border trade between Brazil and neighboring countries can also be made in reais,
thus exempting the Brazilian importer of the currency exchange contract.
CCR
Effective in Latin America for many years, the Reciprocal Lending Agreement “
CCR — employed in international payments, especially in relation to letters of
credit — facilitates the financial relationship among the region’s importers and
exporters.
Through this agreement, the central bank of the importing country pledges to
reimburse the central bank of the exporting country by means of a payment contract,
backing the financial responsibility that the importer has with the exporter.
Periodically, the contract account is settled between the central banks of the different
Latin American Countries, performing the compensation and adjusting the existing
credit and debit.
In the case of Brazilian imports, the Brazilian bank that issued the letter of credit
requests the Central Bank of Brazil to bind the credit to CCR, which is formalized
by means of a registration number.
The advantage in this system is that the Brazilian letters of credit do not need to be
confirmed by a third bank, usually from a developed country, as they are backed
by a contract of reimbursement guarantee that the Latin American central banks
maintain within the CCR.
Thus, the bank charges to have a letter of credit issued in Brazil are reduced for the
importer as the intervention of a confirming bank (which acts as guarantor for the
issuing bank) is not required.
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