Regarding the issuance of Rural Product Notes (Cédula de Produto Rural – CPR) to finance Brazilian agribusiness transactions, the Temporary Law 1,104/22 was edited to regulate the format of electronic signature of book-entry CPRs.
Pursuant to the new regulation, the CPR issuer and the beneficiary (creditor) will agree on the form and level of electronic signature that will be admitted for the purposes of validity, effectiveness and enforceability of the CPR, provided that the following provisions are observed:
(i) for CPR and in the separate document with the description of the assets linked as collateral, if any, the use of a simple, advanced or qualified electronic signature will be allowed; and
(ii) for the registration of in rem collateral (garantia real) constituted by movable and real estate assets (such as fiduciary lien, pledge, mortgage, etc.), the use of advanced or qualified electronic signature will be allowed.
For determination of what is simple, advanced and qualified electronic signature, Federal regulation establishes that:
(i) simple electronic signature, is when the user can register online, through self-declaration validated in government databases;
(ii) advanced electronic signature, is when the user must register with a guarantee of identity from a digital access validator, including biographical and documentary validation, in person or remotely, verified by a public agent; biometric validation verified in a government database; or biometric, biographical or documentary validation, in person or remotely, checked by a digital access validator that demonstrates a high degree of security in its identification processes; and
(iii) qualified electronic signature, is when the user will use a digital certificate.
Temporary Law 1,104/22 is already in force, but must be voted on by the Brazilian National Congress within 60 days, extendable for an equal period. If confirmed by the legislature, it will bring greater legal certainty and ease for issuing CPRs for agribusiness financing.
