Brazil’s BNDES cuts US$4.7 Billion from Lava Jato companies

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Brazil’s BNDES cuts US$4.7 Billion from Lava Jato companies

8:08 CAT | 14 Oct 2016

A general view of the headquarters of Brazilian Development Bank (BNDES)
in downtown Rio de Janeiro August 20, 2014. REUTERS/Pilar Olivares

Reuters / A general view of the headquarters of Brazilian Development Bank (BNDES) in downtown Rio. Suspended payments involve projects operated by large construction and engineering firms linked to the Lava Jato corruption scandal.

Brazil’s Development Bank (BNDES) announced on Tuesday (October 11th) it suspended US$4.7 billion worth of overseas contract payments granted to those companies investigated by federal prosecutors in the Lava Jato (Car wash) scandal. Among the companies affected are some of Brazil’s largest engineering and construction companies.

Brazil,Marcelo Odebrecht, once head of one of Brazil’s largest construction companies is now in jail for money laundering,

Because of the involvement of the country’s leading construction companies in the Lava Jato scandal the financing of engineering operations abroad may be difficult.

“There may be no export of engineering services in the next two or three years,’ the BNDES’ Foreign Trade Division director, Ricardo Ramos, was quoted as saying to Agencia Brasil.

The suspended payments involve projects operated by Odebrecht, OAS, Queiroz Galvão, Camargo Corrêa and Andrade Gutierrez to countries as diverse as Argentina, Cuba, Venezuela, Angola, Mozambique and Ghana.

According to BNDES officials, a total of 47 contracts, in various stages of obtaining financing, are under review, with 25 of them already underway and 22 still waiting for their first approval. The financing on these contracts total over US$13 billion. Of this amount US$2.3 billion was disbursed before Tuesday’s suspension.

The BNDES official also noted that companies requesting financing will have to sign performance agreements with the entity.

“This agreement shall regulate the consequences of the falsity, incompleteness or inaccuracy of such declarations of conformity, including the imposition of fines to the exporter,” explained Ramos.

According to Ramos, the criteria for the 22 projects that have not yet been approved are likely to be more selective, and a negative analysis can lead to the cancellation of the entire project.

Source: The Rio Times