BY-LAWS OF BANCO NACIONAL DE DESENVOLVIMENTO ECONÔMICO E SOCIAL – BNDES

Approved by the Extraordinary General Assembly held on February 20, 2017 (1st AGE), published in the Federal Official Gazette (DOU) on March 21, 2017, and amended by the following General Assemblies: of April 28, 2017 (2nd AGE), published in the Federal Official Gazette (DOU) on September 27, 2017; of October 27, 2017 (3rd AGE), published in the Federal Official Gazette (D.O.U) on October 31, 2010; of April 19, 2018 (4th AGE); of October 26, 2018 (5th AGE), published in the Federal Official Gazette (DOU) on January 10, 2019; of April 30, 2019 (7th AGE), published in the Federal Official Gazette (D.O.U) on May 6, 2019; and of June 7, 2019 (8th AGE), published in the Federal Official Gazette (D.O.U) on June 11, 2019 . 

CHAPTER I

OF NATURE, PURPOSE, HEAD OFFICE, AND DURATION

Art. 1. the Brazilian Development Bank (BNDES), a public company with a legal personality of private law and its own properties, shall be governed by this Social Articles of Association and by the applicable legal filings. Sole paragraph. BNDES is subjected to the supervision of the State Minister of Planning, Development and Management.

Art. 2. BNDES head office is located in Brasília, Federal District, and its central office is located at Avenida República do Chile, 100, Centro, Rio de Janeiro-RJ, operating throughout the national territory, and for the fulfillment of its social object, it is able to install and maintain offices, representations, or branches in the country or abroad, as well as set up subsidiaries.

Art. 3. BNDES is the main instrument of implementation of the investment policies of the Federal Government, and has as primary objective to support programs, projects, works and services related to the social and economic development of the Country.

Art. 4. BNDES will exercise its activities, in order to stimulate the private sector, without loss of support to projects of national interest developed by the public sector.

 Art. 5. The period of duration of BNDES is indeterminate.

 

CHAPTER II – OF CAPITAL AND RESOURCES 

Art. 6. BNDES share capital is R$ 44.699.081.035,08 (44 billion, 699 million, 81 thousand and 35 reais and 08 cents), divided into 6,273,711,452 (six billion, 273 million, 711 thousand and 452) nominative shares, without nominal value.

§ 1 BNDES share capital may be increased after the approval of the General Assembly, up to the limit of authorized capital provided for in the art. 7, without issuing new shares and regardless of amendments to the Articles of Association, in the following cases:

 I – incorporation of reserves for future capital increase, after the approval of the allocation of the year’s income;

II – incorporation of capital and legal reserves when reaching the limit of 20% (twenty per cent) of the share capital;

III – incorporation of the portion of the profit reserve for the equalization of complementary dividends when the reserve reaches its limit and there is no possibility of distribution of the total balance as dividends as defined by BNDES Dividends Policy and as established in art. 40;

IV – through the capitalization of the resources, which the Federal Government intended for this purpose, through a decree of the Executive power.

§ 2 All the shares that constitute BNDES capital are owned by the Federal Government.

Art. 7. BNDES authorized capital is R$ 100,000,000,000.00 (one hundred billion reais). Sole paragraph. BNDES authorized capital can be increased by resolution of the General Assembly, the direct capitalization of profit being prohibited without processing by the reserve account. 

Art. 8. Constitute BNDES resources:

I – the ones of capital, resulting from the conversion in cash, goods, and rights;

II – the operational and assets revenue;

III – the ones from credit operations, being thus understood those from loans and financing obtained by the entity;

IV – donations of any kind;

V – the appropriations consigned by the Federal Government budget;

VI – the compensation due to it from the application of resources from special funds established by the Public Authority and intended to finance programs and projects for economic and social development;

VII – the ones resulting from the provision of services.

 

CHAPTER III

OF OPERATIONS

Art. 9. BNDES, directly or through subsidiary companies, financial agents, or other entities, shall perform banking activities and financial transactions of any kind, related to its purposes, appertaining to it, particularly:

I – pursuant to art. 239, § 1st, of the Constitution of the Republic, to fund economic development programs, with the resources from the Social Integration Program (PIS), established by Complementary Law No. 7 of September 7, 1970, and of the Program of Formation of Assets of the Civil Servant (PASEP), established by Complementary Law no. 8, of December 3, 1970; and

II – to promote the application of resources linked to the Participation Fund PISPASEP, to the Merchant Marine Fund (MMF), and other special funds established by the Public Authority, in accordance with the rules applicable to each one of them.

§ 1 Concerning the operations provided for by this article and its contracting, BNDES can act as an agent of the Federal Government, States and Municipalities, as well as of local entities, public companies, mixed economy societies, public foundations, and private organizations.

§ 2 BNDES operations shall observe the limitations consigned by its global budget of resources and expenditures.

Art. 10. BNDES shall also:

I – hire operations, in the Country or abroad, with foreign or international entities, the acceptance of the form and the clauses usually adopted in international contracts being lawful, including the commitment to resolve doubts and controversies by arbitration;

II – finance the purchase of assets and investments made by national companies abroad, granted that they contribute to the economic and social development of the Country;

III – finance and promote the export of products and services, including installation services, including expenses (export-related) incurred abroad;

IV – make non-refundable applications in projects or programs of education and research, scientific or technological in nature, including by donation of technical or scientific equipment and by publication of technical texts to institutions involved in the development of such projects or programs or that have received financial cooperation with this particular purpose;

V – make non-refundable applications, specifically aimed to support projects and social investments, in the areas of employment and income generation, municipal services, health, education and sports, justice, food, housing, environment, water resources, rural development, and others, linked to social and regional developments projects, as well as cultural projects, in compliance with the rules issued by the Board of Directors;

VI – hire technical studies and provide technical and financial support, including non-refundable, for the structuring of projects that promote the economic and social development of the Country;

VII – as an entity member of the Brazilian National Financial System, to carry out any other operations in the financial and capital market, in accordance with the standards and guidelines of the National Monetary Council; and

VIII – use funds raised in the international market, as long as it contribute to the economic and social development of the Country, to finance the acquisition of assets and the development of projects and investments abroad by Brazilian companies, subsidiaries of Brazilian companies, and foreign companies whose shareholder with greater voting capital is, directly or indirectly, an individual or legal entity domiciled in Brazil, as well as purchase securities issued by or of responsibility of these companies on the primary market.

Sole paragraph. In cases of guarantee from the National Treasury to credits obtained abroad, in accordance with art. 3 of Decree-Law No. 1,312, February 15, 1974, BNDES, having met the conditions hereupon laid down, will provide a guarantee acting as the financial officer of the Federal Government, overseeing the execution of the contract.

 Art. 11. For the granting of financial cooperation, BNDES shall proceed:

I – to the technical and economic-financial examination of the enterprise, project or business plan, including the evaluation of their social and environmental implications;

II – to the refund security verification, except in cases of financial cooperation that, by its nature, involves the acceptance of natural hazards or that is not subjected to refund, in accordance with sections IV, V, and VI of art. 10; and

III – to the determination of the existence of restrictions to the impartiality of the postulant company and of the respective holders and managers, at the discretion of BNDES.

Sole paragraph. The financial collaboration of BNDES shall be limited to the percentages approved by the Board of Directors for specific programs or projects.

 

CHAPTER IV

OF THE GENERAL ASSEMBLY

Art. 12. The General Assembly shall be convened by deliberation of the Advisory Board or, in cases permitted by law, by the Board of Directors, the Fiscal Council or by the Federal Government.

Art. 13. The General Assembly shall ordinarily be held , once a year in accordance to the law and, extraordinarily, whenever BNDES interests so require, observing the legal aspects relating to summonses and deliberations.

§ 1 The works of the General Assembly will be chaired by the Chairman of BNDES, or, in his/her absence, by a Director designated by him/her.

§ 2 The members of the Fiscal Council, or at least one of them, should attend the meetings of the General Assembly and respond to requests for information formulated by the Federal Government.

Art. 14. Without loss to the provisions of Law No. 6,404, of December 15, 1976, it is the General Assembly’s duty to privately deliberate on the following matters:

I – approval of the Annual Administration Report of BNDES and of the financial statements containing proposals for distribution of results and creation of reserves;

II – forfeiture, in whole or in part, of its share capital stock or from its direct subsidiaries; modification of its share capital; waiver of rights to subscribe for shares or debentures convertible into shares of directly controlled companies; and sale of debentures convertible into shares owned by it issued by directly controlled companies;

III – transformation, merger, incorporation, division, dissolution, and liquidation of BNDES, observing the law, especially the provisions of art. 37, section XIX, of the Constitution of the Republic;

IV – exchange of shares or other securities issued by public companies or partnerships of mixed economy and their subsidiaries, controlled directly or indirectly by the Federal Government;

V – amendment of the share capital and Articles of Association;

VI – election and dismissal, at any time, of liquidators, judging their accounts;

VII – election and dismissal, at any time, of the members of the Advisory Board;

VIII – election and dismissal, at any time, of the members of the Fiscal Council and their deputies;

IX – fixation of the amount of compensation of the managers, members of the Fiscal Council, and members of the Audit Committee, in compliance with the applicable legal standards;

X – authorization for BNDES to move public liability lawsuits against managers, for damage caused to its assets and state;

XI – other matters that are included in the agenda of the summons instrument of the General Assembly, not admitting the heading “general affairs”.

 

CHAPTER V

OF THE ADIVISORY BOARD

Art. 15. The body of higher orientation of BNDES is the Advisory Board, composed of eleven members, all elected by the General Assembly, being:

I - 1 (one) appointed by the Minister of Labor;

II - 1 (one) appointed by the Minister of State of Economy;

III - 1 (one) appointed by the Minister of State of Foreign Affairs

IV - 1 (one) appointed by the Minister of State Industry and Foreign Trade

V - 1 (one) appointed  by the State Minister of Planning, Development and Management

VI - 5 (five) appointed by the Minister of State under whose supervision the BNDES is; 

VII - 1 (one) representative of BNDES employees chosen among the active employees, by direct vote of their peers, according to the applicable legislation.

§ 1 At least three of the members mentioned in items I to VI shall be independent, as provided for in Law 13,303 dated June 30, 2016 and Decree 8,945 dated December 27, 2016, and the supervising Ministry shall be responsible for these appointments, in case other Ministries not doing so.

§ 2 The member of the Advisory Board who had its time extended for three times in succession, may be part of the Board again after at least two years after the end of his/her last management period.

§ 3 Once the limit of reappointments referred to in the previous paragraph has been reached, the reappointment of a member of the Board of Directors can only occur after a period equivalent to a term of office.

§ 4. The Board members shall be invested in their positions by signing a term of investiture in the minutes book of the respective Collegiate, within a maximum period of up to 30 days, counted as of the election, otherwise the investiture shall become null and void, except in case of justification accepted by the body for which they have been elected.

§ 5 The term of office of the member of the Board of Directors extends until the investiture of the new member or the member’s reappointment.

§ 6 In case of reappointment of a member of the Board of Directors, the new term of office shall be counted as of the date of termination of the previous one, any extension period not being included 

§ 7 In the case of vacancy in the course of the term of office of members of the Board of Directors, the President of the Board shall inform the relevant entity represented by such member, who shall designate the substitute and be appointed by the remaining directors and serve until the first General Assembly.

§ 8 The new member elected by the General Assembly to fill a vacancy will complete the remaining term of office

§ 9 In case of vacancy in the course of the management of the employee representative, the designation dealt with by § 7 shall fall to the second most voted candidate, who shall complete the management period.

§ 10 The compensation of the members of the Advisory Board shall be fixed by the General Assembly, in compliance with the applicable legal standards, and its payment will be monthly.

§ 11 The term of office of the member of the Board of Directors extends until the investiture of the new member or the member’s reappointment.

§ 12 The President of the Board of Directors and his substitute shall be chosen by the collegiate, the first among the members appointed by the supervising Minister, under the terms of item VI of Article 15 of this statute.

§ 13 In addition to the cases of death, resignation, dismissal, and others provided for by law, the function of the member of the Advisory Board shall be deemed to be vacant who, without a formally justified cause, does not attend two consecutive meetings or three alternated meetings in the range of a year, except for the possibility of acts of God or unforeseeable circumstances.

§ 14 The appointment of the members of BNDES’s Board of Directors mentioned in this article shall comply with the provisions of Law No. 13,303, dated June 30, 2016.

§ 15 The reappointment of a member of the Board of Directors  is prohibited who has not participated in any of the annual training provided by the BNDES on the topics provided for in article 42 of Decree 8,945, dated December 27, 2016, in the last two years .

Art. 16. Without loss to other legal jurisdictions, especially those provided for in art. 142 of Law no. 6,404 of December 15, 1976, it is the Advisory Board’s duty to:

I – express an opinion, when requested by the State Minister of Planning, Development and Management on relevant issues pertaining to the economic and social development of the Country and that are more directly related to the action of the BNDES;

II – advise the President of BNDES on the guidelines of action of the Bank and promote to the main institutions of the economic and social sector, the disclosure of the objectives, programs, and results of the activities of the Bank;

III - to define the matters and volumes of the Board of Directors’ and the Board of Executive Officers’ authority not provided for in this statute;

IV – approve the Overall Expenditure Program and monitor its execution;

V – appraise the Annual Audit Reports and the information about the results of the action of BNDES, as well as the main projects supported by the Bank;

VI – manifest itself on a quarterly basis regarding the financial statements, proposing the establishment of reserves, and on the allocation of the results, if any;

VII – manifest itself on BNDES increase in capital, including by acquisition of capital reserves and profits, to be decided by the General Assembly;

VIII – authorize the creation, extinction, association, merger, or incorporation of subsidiary companies, to carry out auxiliary services or for the execution of undertakings whose objectives are included in the BNDES area of operation;

IX – decide on the vetoes of the BNDES President to the deliberations of the Board;

X – appoint and dismiss the holders in the area of Internal Audit, by proposal from the President of BNDES, after approval of the Federal Government General Comptroller;

XI – approve the company’s general policies, including corporate governance;

XII – approve and review, annually, the Corporate Risk Management Policies;

XIII – establish a Spokesperson Policy in order to eliminate the risk of inconsistency among information from different areas of BNDES and those of the executives of this Institution;

XIV – approve the Policy of demobilization of BNDES in order to verify the existence of assets not for BNDES’ use, and assess the need to maintain them, with the exception of assets acquired as a result of its operating activities, in accordance with arts. 9 and 10 of these Articles of Association;

XV – approve the investment and administrative budgets, including annual and multiannual funding,;

XVI – fix the Information Disclosure Policy and the Transactions with Related Parties Policy;

XVII – approve and periodically revise the Policies and Programs concerning Compliance and Integrity, as well as business performance goals related to strategic planning, observing the statutory legal provisions; or 

XVIII – approve BNDES and its subsidiaries Annual Plan of Internal Audit Activities (PAINT) and the Annual Report of Internal Audit Activities (RAINT);

XIX – implement and oversee the risk management and internal control systems established for the prevention and mitigation of key risks to which BNDES is exposed, including risks related to the integrity of the accounting and financial information and those related to the occurrence of corruption and fraud;

XX – manifest itself expressly about the actions to be implemented for timely correction of deficiencies of control and of operational risk management, pointed out in a report prepared annually by the Integrity and Risk Management area;

XXI – elect and dismiss the members of the Board of Directors of BNDES;

XXII – assess the directors and other statutory members of BNDES, with the exception of members of the Fiscal Council, individually and collectively, every year, in accordance with Law No. 13,303, of June 30, 2016 and Decree No. 8,945, of December 27, 2016, with possibility of relying on procedural and methodological support from the Eligibility Committee;

XXIII – discuss, approve, and monitor decisions involving corporate governance practices, relationships with related parties, personnel management policy, and code of ethics;

XXIV – approve and monitor the business plan and long-term strategy, which must be presented by the Board of Directors of BNDES, promoting an annual analysis of the reaching of goals and results of its implementation and its conclusions shall be published in the electronic site of BNDES as well as informed to the National Congress and the Audit Court, provided they do not contain information of a strategic nature, in accordance with the law.

XXV – appoint and dismiss the members of the Audit Committee, of the Compensation Committee, and of the Eligibility Committee;

XXVI – request that the Internal Audit Area periodically check the activities of the closed complementary pension entity that administers the benefits plan of BNDES and its subsidiaries, covering one or more themes from the following:

a) investment policy and its management;

b) processes for the granting of benefits;

c) methodology used in the actuarial calculation, costing, consistency of the register and adherence of hypotheses;

d) procedures and controls related to the administrative and financial management of the entity;

e) administrative expenses;

f) governance and internal control structure of the entity; and

g) collection of contributions from the sponsors and participants in relation to what was provided for in the funding plan.

XXVII – appraise the internal audit report referred to in section XXVI, and refer it, within 30 (thirty) days, to the National Superintendence of Complementary Pensions (PREVIC), in accordance with the sole paragraph of art. 25, of Complementary Law No. 108, of May 29, 2001;

XXVIII – underwrite the annual letter with the explanation of the commitments of achieving public policy objectives, in accordance with article 8, section I, of Law No. 13,303, of June 30, 2016;

XXIX – in conjunction with the Board of Directors, assess the risks within the organization, developing a vision of risks in a consolidated manner;

XXX – resolve issues to which there are no statutory previsions, subsequently applying , Law no. 6,404, of 1976;

XXXI – appraise the half-yearly report on the closed complementary pension entity and its pension plans, which within 30 (thirty) days, must be submitted to the body responsible for the supervision, coordination, and governance of BNDES, for their interest, and to PREVIC, in accordance with the sole paragraph of art. 25, of Complementary Law No. 108, of May 29, 2001, highlighting:

a) the adherence of the actuarial calculations;

b) the management of investments;

c) the economic, actuarial and financial solvency, liquidity, and balance, of the plans;

d) the management of risks; and

e) the effectiveness of internal controls.

XXXII – approve the creation of advisory committees to support the activities of the Board;

XXXIII – convene the General Assembly when the Board deems convenient, or in the case of article 132 of Law No 6,404/1976;

XXXIV – perform an annual self-evaluation of the Board’s performance;

XXXV – manifest itself on the proposals to be submitted for deliberation in the General Assembly;

XXXVI – adopt and supervise the compliance of BNDES Board of Director to the assumed commitment to article 18, § 10, of these Articles of Association;

XXXVII – approve and disclose the Code of Conduct and Integrity of BNDES and its subsidiaries, as provided for in Law No. 13,303, of June 30, 2016;

XXXVIII – authorize and homologate the hiring of independent auditors, as well as the termination of their contracts;

XXXIX – approve the By-laws of the Advisory Board and of the Audit Committee; and

XL – manifest itself on the fixed and variable compensation of Board members.

Sole paragraph. In the event of a conflict of interests, members of the Advisory Board shall abstain from the discussions and deliberations on the matter, being their duty to communicate their impediment and make brief, in the meeting’s records, of the nature and extent of their interests.

Art. 17. The Advisory Board shall ordinarily meet , once a month, and extraordinarily, whenever called by the President, at his/her discretion, or at the request of at least six of its members.

§ 1 The Board shall deliberate only with the presence of at least six of its members.

§ 2 The deliberations of the Board shall be taken by majority vote and written on the records., In addition to the ordinary vote, the President has the duty of casting the tie-breaking vote.

§ 3 Meeting of the Board of Directors shall be held at BNDES headqueaters or at its central office, with the exception of board member to participate in meetings by teleconference, videoconference or other means of communication that can ensure the effective participation and the authenticity of the member’s vote.

§ 4 The participation of the President of BNDES in the meetings of the Advisory Board is optional, any time he/she considers it pertinent.

 

CHAPTER VI

OF THE MANAGEMENT

Art. 18. BNDES shall be administered by a Board of Directors composed of the President and eight Directors, all elected by the Advisory Board, all able to be discharged ad nutum.

§ 1 The management period of the President and Directors shall be unified, with a duration of two years, with three consecutive renewals allowed.

§ 2 In accordance with the provisions of art. 35 of these Articles of Association, the compensation of the members of the Board of Directors will be submitted for the appraisal of the Advisory Board of BNDES and fixed by the General Assembly.

§ 3 The appointment of the members of the Board shall be granted by signing the instrument of investiture, beginning the management period from this date.

§ 4 The appointment of members of the Board of Directors of BNDES, including the President, shall comply with the provisions of Law No. 13,303, of June 30 2016, and other applicable regulatory norms.

§ 5 The Board members cannot have been managers in the two years preceding the election, of partnerships that were subjected to declarations of insolvency, liquidation, bankruptcy, or judicial intervention, except in cases where the exercise of such function was of responsibility of an indication made by BNDES to act on its service or of its subsidiaries.

§ 6 In case of impediment or temporary absence, shall be replaced: I – the President: Up to 30 (thirty) consecutive days, by a Director appointed by the President of BNDES; For more than 30 (thirty) consecutive days, by someone, in accordance with the law, chosen by the Advisory Board; II – Each Director, by another Director, designated by the President of BNDES, in a cumulative character, without further compensation.

§ 7 In addition to the cases of death, resignation, dismissal, and others provided for by law, the function of the member of the Board of Directors shall be deemed to be vacant who, without a formally justified cause, does not attend its functions for over thirty consecutive days, except for the possibility of acts of God or unforeseeable circumstances.

§ 8 The member of the Board of Directors, elected by the caput form of this article, who had his/her time extended for three times in succession, may be part of the Board again after at least two years after the end of his/her last management period.

§ 9 The renewal of a member of the Board of Directors who has not participated in any of the annual training provided by BNDES on the subjects referred to in article 42, of Decree No. 8,945, of December 27, 2016, is prohibited.

§ 10 The assumption of commitment with goals and specific results to be achieved is a condition for investiture in the position of Director, which shall be approved by the Advisory Board, which is responsible for supervising its compliance.

§ 11 The term of office of the Board member is extended until the investiture of the new member or his reappointment.

Art. 19. It is the Board of Directors’ duty to:

I -  in harmony with the economic and financial policy of the Federal Government and with the guidelines of the Advisory Board to approve:

a) BNDES action guidelines; and

b) operational and administration standards of BNDES, by dispatch of the specific regulations;

II – appraise and submit the Overall Expenditure Program to the Advisory Board and approve the management budget of BNDES and its subsidiaries, which reflects the financial flow for the period;

III – approve the general standards of personnel administration, including those relating to the fixation of the personnel;

IV – approve the internal organization of BNDES and the distribution of competence, as well as the creation of offices, representations, and agencies;

V – deliberate on the responsibility for operations of a single client or on credit limits for a specific economic group, located in the respective level of decision-making jurisdiction established by it;

VI – authorize non-refundable applications for the purposes established by sections IV, V, and VI of art. 10;

VII – authorize the contracting of works and services and the acquisition, rental, forfeiture, and encumbrance of movable assets, real estate, and securities, as well as the waiver of rights, transactions, and arbitration settlements, placed in their level of decision-making jurisdiction, with the possibility of establishing rules and delegating powers;

VIII – authorize the issue of financial statements, including the quarterly ones, proposing the establishment of reserves and the destination of results, if any, by submitting them to the manifestation of the Fiscal Council and of the Advisory Board, and, when necessary, to deliberation at the General Assembly;

IX – authorize the execution of agreements, contracts, and covenants that constitute liens, obligations, or commitments to BNDES, and may establish rules and delegate powers, when these instruments are exclusively of administrative nature;

X – comment on all matters to be submitted to the Advisory Board;

XI – grant vacations, limited to 30 days per year, and licenses set out in accordance with art. 35, of these Articles of Association, to the members of the Board of Directors;

XII – monitor the implementation of the action plan to correct any irregularities found during the implementation of the audit referred to in art. 16, section XXVI, of these Articles of Association, and shall notify the Board of Trustees and the Fiscal Council of the closed complementary pension entity, as well as to the Advisory Board of BNDES, which is the internal instance responsible for verifying the effectiveness of the plan, assisted by the internal structure of supervision;

XIII –, within the framework of the Basic Internal Organization, determine the Essential Units responsible for providing guidance and technical advisory services to the members appointed by the Board of Trustees and Fiscal Council of the closed complementary pension entity;

XIV – present a half-yearly report to the Advisory Board on the closed complementary pension entity and its pension plans, with emphasis on:

a) the adherence of the actuarial calculations;

b) the management of investments;

c) the economic, financial, and actuarial and financial solvency, liquidity, and balance, of the plans;

d) the management of risks; and

e) the effectiveness of internal controls.

XV –, by the last regular meeting of the Advisory Board of the year present: a) a business plan for the next year; b) updated long-term strategy with risk and opportunities analyses for at least the next 5 (five) years.

XVI – annually approve, review, and submit to the Advisory Board , the Corporate Risk Management Policies;

XVII – manifest itself expressly about the actions to be implemented for timely correction of deficiencies of control and of operational risk management, pointed out in a report prepared annually by the area of Integrity and Risk Management;

XVIII – establish metrics for risk management, considering its integration to BNDES’ strategic planning;

XIX – promote the culture of risk management, of process management and the integration of risk management practices to business and to BNDES’ strategic objectives;

XX – approve and periodically review Policies and Programs concerning Compliance and Integrity, submitting them for deliberation of the Advisory Board, in compliance with the statutory or legal provisions;

XXI – monitor the compliance to the Policy and Programs relating to Compliance and Integrity;

XXII – indicate BNDES’ representative for the General Assemblies of FINAME and BNDESPAR; and

XXIII – propose the approval of the Code of Conduct and Integrity of BNDES and its subsidiaries to the Advisory Board.

Sole paragraph. The Board of Executive Officers of BNDES may delegate the approval of transactions incumbent upon a single client, in the form of item V of this article, provided that the maximum amount defined in the terms and conditions previously established in internal regulations is not surpassed.

Article 20. The Board of Executive Officers shall ordinarily meet once a week and, extraordinarily, whenever convened by the President of BNDES, acting in the presence of at least a majority of its members, one (1) shall be necessarily the President or his substitute.

§ 1 The resolutions of the Board of Executive Officers shall be taken by a majority of votes and recorded in minutes, and in addition to the ordinary vote the President shall have the casting vote.

§ 2 The President may veto the deliberations of the Board, submitting them to the Advisory Board.

§ 3 In the event of a conflict of interests, members of the Board of Directors shall abstain from the discussions and deliberations on the matter, their duty being to communicate their impediment and make brief, in the meeting’s records, of the nature and extent of their interests.

§ 4 The meetings of the Board of Executive Officers shall be held at BNDES headquarters or at its central office, with the exception of the participation of a Board member or meetings held by teleconference, videoconference or other means of communication that may ensure the effective participation of its members, as well as the authenticity and integrity of its vote.

Art. 21. It is the President’s duty to:

I – represent BNDES, in court or out of court, with the possibility of delegating this responsibility, in specific cases, and on behalf of the entity constitute legal representatives or attorneys;

II – convene and preside over the Board meetings;

III – administer and direct the assets, services, and business of BNDES, and decide, on the proposal of the individuals responsible for the respective areas of coordination, on operations of responsibility of one single client placed in their level of jurisdiction, established by the Board, with possibility of delegating this responsibility to two Directors;

IV - to supervise and coordinate the work performed by the various BNDES’s units, and may delegate executive and decision-making powers and distribute, among the Officers the coordination of BNDES services, designating, among the members of the Board of Executive Officers, the one in charge of verifying compliance and risk management, pursuant to art. 38;

V – pass the rules necessary for the operation of the bodies and services of BNDES, in accordance with the internal organization and the distribution of competence established by the Board of Directors;

VI – admit, promote, punish, dispense, and practice the other acts included in personnel administration, in accordance with the standards provided for by law and approved by the Board of Directors, with the possibility of delegating this assignment in whole or in part;

VII – authorize the contracting of works and services and the acquisition, rental, forfeiture and encumbrance of movable assets and real estate, except securities, placed in their level of decision-making jurisdiction established by the Board of Directors, with the possibility of establishing rules and delegating powers;

VIII – send the annual rendering of accounts of the administrators of BNDES and the financial statements relating to the previous year, accompanied by the pronouncements of the Fiscal Council and Advisory Board;to the State Minister of Planning, Development and Management, within the legal deadline, for his/her examination and subsequent referral to the Federal Court of Auditors, 

IX – send data on budget matters and other information on the progress of the work of BNDES and its operations;to the competent authorities, within the regulated time limits, 

X – submit BNDES Overall Expenditure Program within the regulated time limit, to the competent body of the Ministry of Planning, Development and Management,;

XI –, every six months submit the balance sheets of PISPASEP, as well as the general relationship of applications of resources from this fund to the Presidency of the Republic, by the State Minister of Planning, Development and Management,;

XII - to reallocate the tasks among the members of the Board of Executive Officers, in case of their temporary impediments, and to appoint the members of the Board of Executive Officers in cases of vacancy, until the filling of the vacancy by the Board of Directors;

XIII – on a quarterly basis, present a report of the activities of BNDES to the Advisory Board; and

XIV - to be responsible for formulating the organization’s strategy and risk management structure, including establishing, maintaining, monitoring and improving internal management controls of BNDES and its subsidiaries.

Sole paragraph. The President may delegate his authority in part, reserving equal authority to one of the members of the Board of Executive Officers, observing the limits to the delegation of authority provided for in the legislation and in this statute.

Art. 22. It is each Director’s duty to:

I – assist the President in directing and coordinating the activities of BNDES;

II – participate in the meetings of the Board of Directors, contributing to ensure the definition of policies by BNDES and reporting matters of their coordination area;

III – exercise the coordination tasks as assigned by the President; and

IV – exercise the executive and decision-making functions delegated by the President or by the Board of Directors.

V – to represent BNDES in or out of court, in specific cases, and also to constitute agents or attorneys-in-fact on behalf of the institution;

§ 1 The authority provided for in this article may be delegated in part and in specific cases, reserving equal authority, observing the limits to the delegation of authority provided for in the legislation and in this statute.

§ 2 The limits for the exercise of the competence provided for in item V shall be established in internal regulations prepared by the BNDES Board of Executive Officers.

Article 23. Contracts entered into by BNDES, or in which it may intervene, and acts involving obligations or liabilities by the Bank, including those of an administrative nature, shall be signed jointly by the President and an Executive Officer or by two Executive Officers.

§ 1 The documents provided for in this article may be signed by one or more attorneys-in-fact, constituted for this express purpose by BNDES, and the power of attorney shall be granted, in the name of the institution, jointly by the President and an Executive Officer or by two Executive Officers.

§ 2 The securities or documents issued as a result of contractual obligations, as well as checks and other payment obligations shall be signed solely by the President.

§ 3 The documents mentioned in § 2 of this article may be signed by at least two attorneys-in-fact, constituted for this express purpose by BNDES, and the power of attorney shall be granted, in the name of the institution, by the President.

§ 4 The power of attorney referred to in this article shall continue to be valid even if its signatory or signatories vacate the position, unless expressly revoked. 

 

CHAPTER VII

OF THE FISCAL COUNCIL

Art. 24. The Fiscal Council of BNDES shall consist of three members and three deputies, all with unified management period of two years, with 2 (two) consecutive renewals allowed, being two members and their respective deputies appointed by the State Minister of Planning, Development and Management, and one member and deputy member appointed by the State Minister of Economy, as representatives of the National Treasury, elected by the General Assembly in any of the cases.

§ 1 The Member appointed by the State Minister of Economy and his/her deputy should be public servants with permanent link to the Federal Public Administration.

§ 2 The appointment of the members of the Fiscal Council shall be made at the moment of election by the General Assembly, regardless of the signature in the instrument of investiture.

§ 3 The management period shall be counted from the election by the General Assembly.

§ 4 When the management period is over, the member of the Fiscal Council shall remain in office until the election of a replacement.

§ 5 In the event of renewal, the new management period will be counted from the end of the previous period.

§ 6 In addition to the cases of death, resignation, dismissal, and others provided for by law, the function of the member of the Fiscal Council shall be deemed to be vacant who, without a formally justified cause, does not attend two consecutive meetings or three alternated meetings in the range of a year, except for the possibility of acts of God or unforeseeable circumstances.

§ 7 The monthly compensation of the members of the Fiscal Council, in compliance with the applicable legal standards, shall be fixed by the General Assembly and will be equivalent to 10% (ten percent) of the average monthly compensation of the Board of Directors, not including benefits, representation funding, and profit sharing.

§ 8 The members of the Fiscal Council will be reimbursed for costs of locomotion and stay necessary for the performance of their function.

§ 9 Fees and reimbursement of expenses for transportation and stay will only be payable to the deputy member of the Fiscal Council in the month in which he/she attends the Council meeting, as registered in the meeting records, in the case of absence of the sitting member.

§ 10 The member of the Fiscal Council who had his/her time extended twice in succession, may be part of the Council again after at least two years after the end of his/her last management period.

§ 11 The renewal of a member of the Fiscal Council who has not participated in any of the annual training provided by BNDES on the subjects referred to in article 42 of Decree 8,945 of December 27, 2016 is prohibited,.

§ 12 The appointment of members of the Fiscal Council of BNDES shall comply with the provisions of Law No. 13,303 of June 30, 2016, and other applicable regulatory norms.

Art. 25. Without loss to the competencies laid down in law No. 6,404 of December 15, 1976, it is the Fiscal Council’s duty to:

I – oversee the acts of the administrators and verify the fulfillment of their legal and statutory duties;

II – review the quarterly financial statements of BNDES;

III – examine and formulate an opinion on the financial statements of BNDES and those of closing of accounts for funds and programs operated or administered by the Bank, expressing its opinion, including on the economic and financial situation of BNDES;

IV – report errors, frauds, or crimes discovered by the Council by any of its members to the bodies of administration and, if those do not take the necessary measures for the protection of the interests of BNDES, to the General Assembly , and suggest useful measures;

V – express an opinion on the proposals for: a) allocation of net profit; b) payment of dividends and interest on equity; c) modification of capital; d) constitution of funds, reserves, and provisions; e) absorption of possible losses with the profit reserves; and f) investment plans or capital budgeting;

VI – assess the periodic reports related to the internal control systems of BNDES;

VII –, at least quarterly meet with the Audit Committee to discuss policies, practices, and procedures identified in the framework of their respective competences; 

VIII – adopt an annual work plan which must contain matters related to the supervision nature of the Council, of general and company-specific character and it must be approved by the month of May of each year;

IX – conduct an annual self-assessment of the performance of the Council, taking into account the implementation of the work plan, up to the month of March of the calendar year following the approval of the plan;

 X – exercise other duties linked to its supervisory power according to the current legislation.

§ 1, through formal communication to the members of the Fiscal Council the management bodies are required to make a copy of the records of their meetings available  within ten days and within two weeks of its development, copies of the balance sheets and other financial statements periodically made, as well as of the budget implementation reports.

§ 2, at the request of any of its members the Fiscal Council shall request clarification or information from the administrative bodies and the preparation of financial or special accounting statements.

§ 3 The Fiscal Council shall ordinarily meet , every two months and extraordinarily, whenever called by its President or by the Advisory Board, in the cases provided for by law. 

§ 4 In the event of a conflict of interests, members of the Fiscal Council shall abstain from the discussions and deliberations on the matter, their duty being to communicate their impediment and make brief in the meeting’s records of the nature and extent of their interests.

§ 5 It is possible for a Council member to participate in meetings by videoconference or other means of communication that can ensure the effective participation and the authenticity of the member’s vote, which will be considered valid for all legal purposes and incorporated into the records of that meeting.

 

CHAPTER VIII

OF THE AUDIT COMMITTEE

Art. 26. The Audit Committee shall be composed of 3 (three) members, appointed by the Advisory Board, independent in its majority, being one of its members part of the Advisory Board of BNDESPAR.

§ 1 The appointment of members of the Audit Committee shall observe the rules laid down in Law No. 13,303, of June 30, 2016, and Decree No. 8,945, of December 27, 2016, as well as those adopted by the National Monetary Council and by the Inter-ministerial Commission of Corporate Governance and of Administration of the Intergroup Investments of the Federal Government (CGPAR), concerning the conditions for the exercise of their term.

§ 2 The members of the Audit Committee shall have a term of 2 (two) years, non-coincident to each member, except in cases in which standards with a different sense exist, issued by a supervisor body of the Brazilian National Financial System. The term may be ceased at any time by decision of an absolute majority of the Advisory Board, with justified vote and , with a re-election being thus allowed.

§ 3 The compensation of the members of the Audit Committee shall be fixed by the General Assembly of BNDES in an amount not lower than the compensation of the Fiscal Council.

§ 4 If the member of the Audit Committee is also a member of the Advisory Board of BNDES or of connected companies, he/she should opt for the compensation of a member of this Committee.

§ 5 The duties of the members of the Audit Committee cannot be delegated.

Art. 27. The Audit Committee shall report to the Advisory Board and shall be the same for BNDES and its subsidiaries.

Sole paragraph. The functioning of the Audit Committee shall be regulated by internal regulations approved by the Advisory Board of BNDES.

Art. 28. It is the Audit Committee’s duty to:

I – opine in the hiring and dismissal of independent auditors to BNDES and its subsidiaries;

II –, prior to publication, review the half-yearly financial statements, including explaining notes, administration reports, and opinions from independent auditors related to BNDES and its subsidiaries;

III – assess the effectiveness of internal and independent audits, including the verification of compliance with legal and regulatory devices applicable to BNDES and its subsidiaries, in addition to its internal normative acts;

IV – assess the fulfillment of the recommendations made by the independent auditor or by the internal auditor, by the administration of BNDES and its subsidiaries,;

V – establish and disclose procedures for the reception and processing of information about breaches of legal provisions and regulations applicable to BNDES and its subsidiaries, including its internal normative acts, foreseeing specific procedures for the protection of the service provider and the confidentiality of the information;

VI – recommend corrections or improving policies, practices, and procedures identified within the framework of its attributions to the Board of Directors of BNDES and its subsidiaries;

VII – at least quarterly, meet with the Board of Directors of BNDES and its subsidiaries, the independent auditors, and the internal auditors, to verify compliance with its recommendations or questions, including with regard to the planning of the audit procedures, formalizing in records the contents of these meetings;

VIII – meet with the Fiscal Council and the Advisory Board of BNDES and its subsidiaries, by request of these statutory bodies, to discuss policies, practices, and procedures identified in the framework of their respective competences;

IX – yearly develop a document named Report of the Audit Committee, to be submitted to the Advisory Board and to the Fiscal Council of BNDES and its subsidiaries, with information on the activities, results, conclusions, and recommendations of the Audit Committee, registering possible significant differences among Advisory Board, independent auditors and the Audit Committee regarding the financial statements, and also containing the following information:

a) activities carried out within the framework of its duties in the period;

b) evaluation of the effectiveness of the systems of internal control of BNDES and its subsidiaries, observing the provisions of the current legislation and highlighting the identified deficiencies;

c) description of the recommendations presented to the Board of Directors of BNDES and its subsidiaries, highlighting those that were not observed, accompanied by the respective justifications;

d) assessment of the effectiveness of internal and independent audits, including the verification of compliance with internal legal, regulatory, and normative devices applicable to BNDES and its subsidiaries, highlighting the identified deficiencies;

e) evaluation of the quality of the financial statements of each period, with an emphasis on the application of the accounting practices adopted in Brazil and in compliance with the standards issued by the Central Bank of Brazil, highlighting the identified deficiencies;

X – keep the Report of the Audit Committee at the disposal of the Central Bank of Brazil and of the Advisory Board of BNDES and its subsidiaries, for a period of at least five years, starting from its preparation; 

XI –, together with the half-yearly financial statements, publish a summary of the Report of the Audit Committee, highlighting the main information contained in this document;

XII – supervise the activities of independent auditors, evaluating their independence, the quality of the services provided and the adequacy of such services to the needs of BNDES and its subsidiaries;

XIII – supervise the activities carried out in the areas of internal control, internal audit and preparation of the financial statements of BNDES and its subsidiaries;

XIV – monitor the quality and integrity of the internal control mechanisms, of the financial statements and of the information and measurements published by BNDES and its subsidiaries;

XV – assess and monitor risk exposures of BNDES and its subsidiaries, with the possibility of requiring, among other things, detailed information on policies and procedures concerning: the compensation of the Advisory Board;) b) utilization of assets of BNDES and its subsidiaries; c) expenses incurred on behalf of BNDES and its subsidiaries;

XVI –together with the Advisory Board and the Internal Audit Area, assess and monitor the appropriateness of transactions with related parties;

XVII – assess the reasonableness of the parameters on which the actuarial calculations are based, as well as the result of actuarial benefits plans kept by the closed complementary pension entity sponsored by BNDES and its subsidiaries;

XVIII – inform the Central Bank of Brazil and the Advisory Board of the existence or evidence of fraud, failures, or errors that put at risk the continuity of BNDES and its subsidiaries or the trustworthiness of its financial statements, in the form and within the time limits established by the specific standards,;

XIX – annually prepare and submit for deliberation of the Advisory Board of BNDES and its subsidiaries, a proposal for implementation of the Annual Plan of Internal Audit Activities (PAINT) by the end of the third quarter, 

XX – monitor the implementation of the measures determined by the regulatory and control bodies;

XXI – assess and report about any differences between the independent auditors and Boards of Directors of these companies, regarding financial statements and financial reports to the Advisory Board of BNDES and its subsidiaries;

XXII – assess the effectiveness of the Ombudsman Office of BNDES and its activity reports;

XXIII – assist the Advisory Boards of BNDES and its subsidiaries regarding the exercise of its audit and inspection functions; and

XXIV – other than may be laid down by the National Monetary Council, by the Central Bank of Brazil, through the Inter-ministerial Commission of Corporate Governance and of Administration of the Intergroup Investments of the Federal Government (CGPAR), or by the Advisory Board of BNDES and its subsidiaries.

§1 At least one of the members of the Audit Committee shall participate in the meetings of the Advisory Board which deal with the periodic financial statements, hiring of independent auditors and PAINT.

§ 2 BNDES shall provide administrative support to the Audit Committee and provide ways for it to receive complaints, including internal and external confidential information on matters related to the scope of its activities.

§ 3 the Audit Committee shall hold at least four monthly meetings, so that the accounting information is always appraised before disclosure.

§ 4 BNDES shall disclose the records of the meetings of the Audit Committee.

§ 5 If the Advisory Board consider that disclosing the records could endanger a legitimate interest of BNDES or its subsidiaries, it may only disclose the extract of the record.

§ 6 The restriction provided for in § 5 shall not be enforceable against the control bodies, which will have total and unrestricted access to the contents of the records of the Audit Committee, observing the confidentiality.

 

CHAPTER IX

OF THE ELIGIBILITY COMMITTEE

Art. 29. The Eligibility Committee shall be composed of the same members of the Audit Committee appointed by the Advisory Board, without additional compensation.

§1 It is the Eligibility Committee’s duty to:

I – help the controlling shareholder in the indication of members of the Board of Directors and of the Advisory Board of BNDES and its subsidiaries, including by means of verification of compliance with the criteria laid down in Law No. 13,303/2016 and in other applicable regulatory standards;

II – verify the completeness of the evaluation process of the members of the Board of Directors and of the Advisory Board of BNDES and its subsidiaries, in accordance with the parameters established by Law No. 13,303/2016;

III – provide methodological and procedural support to the Advisory Boards in evaluating the performance of Directors and statutory members, in the form of article 16, section XXII; and

IV – inform the controlling shareholder and the Advisory Board of BNDES and its subsidiaries the result of their assessments.

§ 2 The records shall be disclosed.of the meetings of the Eligibility Committee, carried out in order to verify compliance with the requirements defined in the indication policy, with the record of any differing manifestations from the members of the Committee.

 

CHAPTER X

OF THE OMBUDSMAN’S OFFICE

Art. 30. The Ombudsman Office of BNDES shall act as main channel of complaint, communication, and mediation between companies that constitute the BNDES system and society, as well as its internal public, including mediation of conflicts.

§ 1 The function of the Ombudsman shall be exercised by an employee who composes the permanent personnel of BNDES or its subsidiaries, by commission consistent with the tasks of the Ombudsman Office, who shall exercise the term for a period of two years with one allowed renewal, being appointed and removed at any time by the President of BNDES.

§ 2 The function of Ombudsman must be full time and exclusive dedication, and the employee cannot perform any other activity at BNDES or its subsidiaries.

§ 3 The employee appointed for exercising the function of Ombudsman, in addition to integrating the permanent staff of the BNDES or its subsidiaries, without prejudice to other requirements set forth in legal or infra-legal regulations, shall:

I - have at least 10 (ten) years of effective service in any of the companies of the BNDES System and have at least 5 (five) years exercising an executive function;

II - have an unblemished reputation;

III - not hold office or function in political parties, associations, trade unions or employers’ associations;

IV - not be included in the ineligibility hypotheses provided for in the items in item I of the caput of art. 1 of Complementary Law 64, dated May 18, 1990, as amended by Complementary Law 135, dated June 4, 2010; and

V - not to have received administrative penalties of a serious nature, as or more severe than suspension, or sanction provided for in the Code of Ethics of the BNDES System.

§ 4 The removal of the Ombudsman during the term of office may occur:

I - at her or his request;

II - in case of exercising activity or function that configures conflict of interest with the function of Ombudsman;

III – in case of ethical conduct incompatible with the function, as resolved by the BNDES Ethics Committee;

IV - due to nonattendance or negligence in the performance of his/her duties and functions, as resolved by the BNDES Board of Directors, respecting ample right of defense;

V - to perform executive function at BNDES or to hold other Federal, State or Municipal public appointment, job or function; or

VI - due to noncompliance with the requirements of this article.

Art. 31. BNDES Ombudsman’s Office shall have its organizational structure proposed according to art. 42, being conferred to it the following attributions, as well as those provided in the National Monetary Council Resolution that provides for the formation and operation of Ombudsman Offices by financial institutions and other institutions authorized to operate by the Central Bank of Brazil,:

I – provide service of last resort to the complaints, requests, and questions of citizens and users of products and services from the BNDES system, which were not resolved by the usual service conducted by its channels and any other means of service;

II – act as a channel of communication between the companies of the BNDES system and its citizens and users of products and services of the BNDES system, including in the mediation of conflicts; and

III – inform the Advisory Board of the activities of the Ombudsman Office, proposing corrective measures or of improvement of procedures and routines, due to the analysis of the received complaints to it and to the Board of Directors of BNDES.

Art. 32. The Ombudsman’s office shall perform the following activities:

I – provide service, register, inform, analyze, and give formal and suitable treatment to the demands of citizens and users of products and services of the BNDES system;

II – provide clarifications to applicants on the progress of their demands, stating the period for reply;

III – forward conclusive answers to the demands within the regulated time limit;

IV – keep the Advisory Board informed about problems and deficiencies detected in the fulfillment of their duties and on the outcome of measures adopted by the institution’s administrators to address them; and

V – prepare and forward a quantitative and qualitative report of the activities carried out by the Ombudsman’s Office in the performance of its duties to the Internal Audit area, to the Audit Committee and to the Advisory Board at the end of each semester,.

Art. 33. BNDES shall create appropriate conditions for the functioning of the Ombudsman’s Office, especially to BNDES and its subsidiaries, ensuring its access to the information necessary for the performance of its activities. 

 

CHAPTER XI

OF THE COMPENSATION COMMITTEE

Art. 34. The Compensation Committee will be composed of three members, with management of 2 (two) years, being permitted a maximum of 3 (three) consecutive renewals with no pay.

§1 The members of the Committee shall be appointed by the Advisory Board and can only be removed before the end of the management period by a motivated decision of this body.

§ 2 At least one of the 3 (three) members of the Compensation Committee should not be a member of the Advisory Board or of the Board of Directors of BNDES.

§ 3 The previous occupant of the position will only be named again to compose the Compensation Committee after, at least, three years of his/her dismissal.

§ 4 The investiture of the members of the Compensation Committee shall be made in the record of the meeting immediately after his/her appointment.

§ 5 The members of the Compensation Committee shall possess the qualifications and experience necessary to independently assess , the compensation policy of Directors. 

§ 6 In addition to the cases of death, resignation or dismissal by the Advisory Board, the function of the member of the Compensation Committee shall be deemed to be vacant who, without a formally justified cause, does not attend 2 (two) consecutive meetings or 3 (three) alternated meetings in the range of 1 (one) year, except for the possibility of acts of God or unforeseeable circumstances.

§ 7 the Compensation Committee shall meet at least once every ninety days, with the presence of all its members and shall have its operation and duties regulated in internal regulations approved by the Advisory Board.

§ 8 The Compensation Committee shall report to the Advisory Board of BNDES and shall be the same for BNDES and its subsidiaries.

Art. 35. It is the Compensation Committee’s duty to:

 I – develop the compensation policy of Directors of BNDES and its subsidiaries, proposing the various forms of fixed and variable remuneration to their respective Advisory Board and to the General Assemblies, in addition to any benefits and advantages attributable to them, meetingt the requirements set out in Law No. 6,404, of December 15, 1976; 

II – oversee the implementation and operationalization of the compensation policy of Directors of BNDES and its subsidiaries;

III – annually review the compensation policy of Directors of BNDES and its subsidiaries, recommending its correction or improvement to the respective Advisory Boards and General Assemblies;

IV – propose the overall compensation amounts of Directors to the respective Advisory Boards and General Assemblies,;

V – evaluate future internal and external scenarios , and their possible impacts on the compensation policy of Directors of BNDES and its subsidiaries;

VI – analyze the compensation policy of Directors of BNDES and its subsidiaries regarding market practices, with a view to identifying significant discrepancies in relation to similar companies, proposing the necessary adjustments;

VII – ensure that the compensation policy of Directors of BNDES and its subsidiaries is permanently compatible with the risk management policy, with the goals and current and expected financial condition of BNDES and with the provisions of the standards issued by the National Monetary Council;

VIII – request clarifications for the preparation and review of the remuneration policy of Directors from the Boards of Directors of BNDES and its subsidiaries, or any of its members,;

IX – prepare the “Report of the Compensation Committee”,, by March 31 of each year, in the terms specified in the standards issued by the National Monetary Council; and

X – disclose all and any form of compensation of Directors of BNDES and its subsidiaries.

 

CHAPTER XII

OF THE INTEGRITY AND RISK MANAGEMENT AREA

Art. 36. The Integrity and Risk Management area shall be one for BNDES and its subsidiaries, shall report to the President of the BNDES, and shall be led by the statutory Director indicated by the President.

§ 1 The Integrity and Risk Management area can refer directly to the Advisory Board in the case provided for in article 9, § 4, of Law no. 13,303 of June 30, 2016 and other external or internal regulatory standards.

§ 2 BNDES shall create appropriate conditions for the functioning and independence of the Integrity and Risk Management area, ensuring its access to the information necessary for the performance of its activities.

Art. 37. The Integrity and Risk Management shall have its organizational structure proposed in the form of art. 41, the following duties, among others, being assigned to it,:

I – define and propose to the Board of Directors and the Advisory Board, the general guidelines of Risk Management, Internal Controls, and Compliance and Integrity to BNDES and its subsidiaries;

II – monitor the potential financial losses arising from credit risk, market, liquidity, and operational exposure levels fixed by BNDES;

III – monitor the regulatory capital consumption sensitized by the potential credit, market and operational risk, in order to ensure adherence to the current standards;

IV – propose actions of improvements in the Risk Management Policies and Policies, Rules, and Parameters of Credit, Provision, and Financial Operations in their respective instances, at the time of the identification of trends of materialization of the risks that compromise the capital levels, as well as the estimated results of BNDES and its subsidiaries;

V – ensure the regularity of the disclosure of information and indicators relevant to risk management to the Board of Directors and the Advisory Board;

VI – ensure the formatting and delivery of information in reports to external bodies, aiming to follow the practices recommended by the Basel I;

VII – define and submit proposals for Risk Management policies to the Board of Directors and to the Advisory Board, in particular of Credit, Market and Liquidity, Operational, of Business Continuity Management, Internal Controls, and Compliance and Integrity; 

VIII – evaluate the quality of the existing internal controls in BNDES and its subsidiaries, the definition of responsibilities, segregation of duties, the risks involved, and conformity to the internal and external regulatory processes, proposing measures for improvement, in order to avoid conflicts of interest and fraud;

IX – disseminate cultures of internal controls, risk management, and Compliance and Integrity concerning BNDES and its subsidiaries;

X – develop and monitor the Integrity Program of BNDES and its subsidiaries;

XI – prepare quarterly reports of its activities, submitting them to the Board of Directors, the Advisory Board, and the Audit Committee, in accordance with internal regulation;

XII – communicate the occurrence of acts or conducts that violate the rules applicable to BNDES and its subsidiaries to the Board of Directors, to the Advisory Board, and the Audit Committee, in accordance with internal regulation; 

XIII – report the main deficiencies found in the environment of risks and controls of BNDES and its subsidiaries to the Board of Directors and to the Advisory Board, as well as the actions implemented for the correction of these deficiencies; 

XIV – plan, organize, coordinate, and perform other activities assigned to it by higher authority to which it is bound; and

XV – develop the Code of Conduct and Integrity of BNDES and its subsidiaries.

 

CHAPTER XIII

OF THE FISCAL YEAR, FINANCIAL STATEMENTS AND PROFITS

Art. 38. BNDES fiscal year shall coincide with the calendar year.

Art. 39. BNDES shall draft financial statements and proceed to the determination of results on June 30 and December 31 each year. Sole paragraph. In the financial statement of December 31 the proposal for destination of the results, in accordance to art. 40, according to §3 of art. 176 of Law no. 6,404, of 1976 shall be recorded.

Art. 40. The Board of Directors shall propose the destination of net income for the year, after absorbing accumulated losses, for manifestation of the Advisory Board, and subsequent approval by the General Assembly of BNDES, observing the following conditions:

I – Legal Reserve: 5% (five percent), until it reaches 20% (twenty percent) of the share capital;

II – constitution of the reserves provided for in arts. 195, 195-A, and 197 of Law No. 6,404 of 1976, if applicable;

III – payment of dividends: minimum of 25% (twenty-five percent) calculated based on the adjusted net income, in accordance to subsections “a” and “b” of section I of art. 202 of Law no. 6,404, of 1976;

IV – formation of a Profit Reserve for Complementary Dividends Equalization, whose value shall match the application of the percentage of 35% (thirty-five percent) on the adjusted net income, according to section III of this article; and

V – formation of a Profit Reserve in the percentage of 40% (forty percent) of the adjusted net income for Future Capital increase in order to ensure the strengthening of the capital structure of BNDES, , according to section III of this article. 

§ 1 the value of compensation, paid or credited, as interest on own equity, in accordance with art. 9, § 7th of Law no. 9,249, of December 26, 1995, and relevant legislation may be attributed to the value intended for dividends, determined as provided for in this article, integrating the respective importance, for all legal purposes,.

§ 2 The amount of interest paid or credited in the form of § 1 may not exceed the amount destined for the payment of dividends, from which it will be deducted.

§ 3 The loss for the financial year shall be mandatorily absorbed by retained profits, by profit reserves, and capital reserves, in that order, the reduction of the share capital up to the amount of the remaining balance being optional, as provided for in art. 173 of Law no. 6,404, of 1976.

§ 4 The financial statements should be appraised by the Advisory Board and examined by the Fiscal Council, by March 31 of each year, and submitted to the competent bodies within thirty days. The decision should be properly published and archived.

§ 5 Concerning the values of dividends and interest by way of remuneration of equity due to the National Treasury, financial costs equivalent to the SELIC rate shall be due from the end of the fiscal year until the day of effective payment, without loss to the interest on arrears when this collection or payment does not take place on the date specified in the law or of the decision of the General Assembly, and the same SELIC rate published on the fifth working day before the day of the effective payment of the obligation.should be regarded as the daily rate for updating this value during the five working days prior to the date of payment or collection, 

§ 6 The reserve provided for in section IV of the caput aims to ensure resources for additional compensation to the Federal Government and its balance can be distributed before reaching the limit referred to in § 7, provided that the prudent limits and minimum corporate capital provided for in the Dividend Policy of BNDES are respected.

§ 7 The reserve provided for in section IV of the caput shall be limited to 50% (fifty percent) of the share capital.

§ 8 When the limit provided for in § 7 of the caput is reached, the Advisory Board shall submit the proposal for allocation of the balance of the reserve for the payment of dividends for deliberation of the General Assembly or, if it is not possible, to the increase of the share capital, in accordance with the Dividend Policy. 

§ 9 The balance of the reserve provided for in section V of the caput shall be incorporated into the share capital, by resolution at an Extraordinary General Assembly, to be convened to be held the same day as the Ordinary General Assembly to approve the allocation of the result of the financial year.

§ 10 The anticipation of the distribution of results for the year may be authorized by resolution of the Advisory Board, based on verification of positive result in the half-yearly balance sheet in the form of interest on equity anticipation, as provided for by law and the same parameters observed for the compulsory and supplementary dividends distribution prescribed in sections III and IV of this article.

 

CHAPTER XIV

OF THE INTERNAL ORGANIZATION AND OF PERSONNEL

Art. 41. The organizational structure of BNDES and its distribution of competence shall be established by the Board of Directors, upon proposal of the President of the Bank.

Sole paragraph. The internal audit body of BNDES is directly bound to the Advisory Board.

Art. 42. The legal regime established by the current legislation for private employment relationships shall be applied to BNDES’ personnel.

§ 1 The entry of personnel shall be by public sector recruitment examination with or without title analysis, in compliance with the specific regulations issued by the Board of Directors.

§ 2 The assignment to BNDES of civil servants of the direct or indirect Public Administration shall be in accordance with the peculiarities of each case, subject to the provisions of the relevant legislation.

Art. 43. The commissioned offices of BNDES , shall be filled by employees of its permanent personnel or of its subsidiaries up to the maximum level of Superintendent or equivalent.

Sole paragraph. The designations of the Chief of Staff of the Presidency, the heads of   ment, limited to the headquarters of BNDES, their representations or of its subsidiaries and representations located abroad, and of the advisers and secretaries of the President and of the Board of Directors may befall on individuals who are not members of the permanent personnel from BNDES or its subsidiaries, these limited to two percent of the total number of the personnel of BNDES and its subsidiaries.

 

CHAPTER XV

OF GENERAL AND TRANSITIONAL PROVISIONS

Art. 44. BNDES shall observe the general budgetary and accounting standards issued by the National Monetary Council, without loss to the observance of legal provisions applicable to public companies in the budget and accounting areas.

Art. 45. BNDES may allocate resources for the formation of specific funds that, in accordance with the regulation approved by the Board of Directors, have the objective of eventually supporting the development of initiatives related to studies, programs, and projects mentioned in sections IV, V, and VI of the caput of art. 10.

Sole paragraph. The funds referred to in the caput shall be comprised of:

I – provisions consigned in the budget of BNDES, corresponding to up to 10% of its net income for the previous year and limited to one and a half percent of its net worth deducted the worth valuation adjustment balance from non-performed gains and losses, calculated by the market valuation of securities classified as “available-for-sale”; and

II – donations and transfers made to BNDES for the purposes provided for in the caput.

Art. 46. BNDES will ensure defense in court and/or in administrative proceedings instituted against them for committing acts in the performance of duty or function to its employees, managers, and members of the Fiscal Council, Audit Committee, Compensation Committee and Eligibility Committee, present and past, in cases where there is noncompliance with the company’s interests,.

§ 1 In the form and extent defined by the Board of Directors, subject to the provisions of the caput, BNDES can keep a permanent insurance contract in favor of the people mentioned, to insulate them from responsibility for acts or facts for which they may be demanded legally or administratively.

§ 2 If any of the people mentioned in the caput is convicted by final judicial decision, on the grounds of breach of law or of these Articles of Association, he/she shall indemnify BNDES of all costs and expenses of legal assistance, in accordance with the law.

§ 3 The Board of Directors shall regulate the form, conditions, and limits for the granting of legal aid.

Art. 47. BNDES shall submit the signature of agreements with shareholders or waiver of rights provided for therein for prior agreement of the Ministry of Economy or even assumption and any commitments of corporate nature pertaining to the provisions of art. 118 of law no. 6,404, of 1976. Art. 48. The controversies, disputes, and disagreements related to activities, contracts, and agreements of any nature from BNDES may be submitted for conciliation, mediation, arbitration and other alternative mechanisms of consensual solution of conflicts, by decision of the competent authority, in accordance with arts. 19, 21, 22, and 23 of these Articles of Association.

§ 1 The conciliation, mediation, and arbitration shall be held in Brazil, in the Portuguese language, and observing the relevant legislation, in particular Law no. 9,307, of 1996, and Law no. 13,140, of 2015, except in cases involving international controversies, disputes, and divergences.

§ 2 The controversies, disputes, and differences involving the Federal Government, States, Federal District, Municipalities, and their bodies, foundations, local authorities and State companies under their supervision or control, shall preferably be resolved through the Conciliation and Arbitration Chamber of the Federal Administration of the Federal Attorney’s Office.