One month after announcing the cessation of financing to the Brazilian defense industry, Banco do Brasil (BB) announced that it will resume commercial operations with the sector after a meeting held on Monday, February 26, between the ministers of Development, Industry, Trade, and Services Geraldo Alckmin, Defense Minister José Múcio Monteiro, Chief of Staff Rui Costa, and BB President Tarciana Medeiros.
It is worth remembering that at the end of January, BB sent a communication to defense companies informing them that, from this moment forward, it will cease financing projects, with the Brazilian government being responsible for sending the corresponding budgetary allocations to fulfill ongoing work and guarantee planned exports. This policy coincided with that taken by other private banks, which, for governance reasons, decided not to make investments or provide financing to companies engaged in the manufacture of weapons, equipment, or related vehicles.
In a recent statement issued by the Ministry of Development, Industry, Trade, and Services, it was announced that BB will continue to issue interbank guarantees, using resources from the Export Guarantee Fund (FGE), regarding compliance guarantees and advance payment refunds. This decision by the ministry led by Alckmin “will prevent harm to companies in the sector that were at risk of losing contracts and will contribute to the sustainability and autonomy of the Defense Industrial Base.”
Additionally, it was noted that “This decision reinforces the importance of aligned and structured financial policies that guarantee not only the economic viability of companies but also national security and sovereignty.”
The guarantees in question, which usually represent around 30% of the export value, act as insurance in case there is any problem with the delivery of the material. In case of any breach, the buyer can execute the guarantee and receive a refund of the advance payment.
*Images used for illustrative purposes.
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