The Brazilian Development Bank (BNDES) is considering resuming financing for service exports, writes Bloomberg.
The bank had restricted these operations in 2016 following allegations of corruption involving Brazilian contractors using bank funds for overseas projects.
At present, such operations are suspended.
According to BNDES representatives, they believe the restriction lacks justification. They contend that the institution’s funds are used for financing services provided by domestic firms rather than foreign governments.
These financing operations, they argue, encourage the sales of machinery and equipment to other markets.
This is because service-providing companies use these products to complete their overseas projects.
However, this move faces opposition, with 40 projects currently in Congress aiming to prohibit the BNDES from financing service exports.
To address this, the bank intends to negotiate with the Federal Court of Accounts (TCU) and Congress to find a way to restart these operations.
A representative from the bank underscored the need to avoid criminalizing service exports, stating that not being active in this market reduces Brazil’s competitiveness.