Statute of MERCOSUR’s Guaranty Fund for Micro, Small and Medium-Sized Businesses

The Common Market Council created the MERCOSUR Support Fund for Small and Medium-Sized Businesses which participate in productive integration initiatives (CMC Decision No 13/08), to foster investments, consolidate complementary markets and increase competitiveness of the productive sectors of the Parties to MERCOSUR. An Ad Hoc Group has been created for drafting of the Guaranty System By-laws.

By CMC Decision No 41/08, the Common Market Council created the MERCOSUR Guaranty Fund for Micro, Small and Medium-Sized Businesses (the “Guaranty Fund”).

Besides, through CMC Decision No 42/08, enacted December 15, 2008, the Common Market Council issued the Guaranty Fund By-laws, which sets forth the entity’s basic regulation. The Parties must incorporate this decision into their legal systems within 30 days from the date on which CMC Decision No 41/08 is in effect.

The Guaranty Fund shall guarantee, with its own financial resources, credit transactions undertaken by micro, small and medium-sized businesses located within the Parties’ territories. These transactions must promote productive integration, either by granting guaranties on loans given by Intermediary Financial Institutions or by issuing counter-guaranties for guaranties granted by local Guarantor Entities.

The Guaranty Fund’s resources shall be composed of the Parties’ contributions and revenues obtained from guaranty commissions. The Parties’ contributions must be made available within 90 days from the approval of the budgets of the contributing Party. The Guaranty Fund shall start operations when at least three Party contributions have been made.

In order to obtain guaranties or counter-guaranties granted by the Guaranty Fund, a business must certify its status as a micro, small or medium-sized business, according to MERCOSUR regulations in force. These businesses are also required to participate in integrating productive activities with at least two Parties, or, in certain cases, prove their intention to invest in future undertakings.

The guaranties or counter-guaranties offered by the Guaranty Fund shall not exceed 80% of the value of the respective loan or guaranty.

The Administration Council determined that the Guaranty Fund Operator shall enter agreements with Intermediary Funding Institutions of all Parties. Said agreements shall empower these Institutions to grant loans guaranteed by the Guaranty Fund to businesses located in any Party’s territory, observing the regulations in force and the terms set forth in the By-laws, the Rules and the operational procedures established by the Guaranty Fund Operator.