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COMMITMENTS AND CONTINGENCIES | 3 Months Ended
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Mar. 31, 2021
Commitments and Contingencies Disclosure [Abstract] |
COMMITMENTS AND CONTINGENCIES | COMMITMENTS AND CONTINGENCIES Bunge is party to claims and lawsuits, primarily non-income tax and labor claims in South America, arising in the normal course of business. Bunge is also involved from time to time in various contract, antitrust, environmental litigation and remediation and other litigation, claims, government investigations and legal proceedings. The ability to predict the ultimate outcome of such matters involves judgments, estimates and inherent uncertainties. Bunge records liabilities related to legal matters when the exposure item becomes probable and can be reasonably estimated. Bunge management does not expect these matters to have a material adverse effect on Bunge’s financial condition, results of operations or liquidity. However, these matters are subject to inherent uncertainties and there exists the remote possibility that a liability arising from these matters could have a material adverse impact in the period the uncertainties are resolved should the liability substantially exceed the amount of provisions included in the condensed consolidated balance sheets. Information regarding the claims appears in Bunge’s Report on Form 10-K for the year ended December 31, 2020. Included in Other non-current liabilities at March 31, 2021 and December 31, 2020 are the following amounts related to these matters:
(US$ in millions) | March 31, 2021 | December 31, 2020
Non-income tax claims | $ | 21 |  | $ | 20 |
Labor claims | 67 |  | 54 |
Civil and other claims | 89 |  | 96 |
Total | $ | 177 |  | $ | 170 |
Brazil Indirect Taxes Non-income tax claims - These tax claims relate to ongoing claims against Bunge’s Brazilian subsidiaries, primarily value-added tax claims (ICMS, ISS, IPI and PIS/COFINS). Bunge expects to pay Brazilian reais (R$) 18 million (approximately $3 million) in 2021 to settle a portion of its outstanding liabilities in amnesty programs in certain Brazilian states regarding certain tax credits. On October 8, 2020, the Company was notified that the Brazilian Federal Court of Appeal ruled in favor of the Company in a case against Brazilian tax authorities regarding the right to exclude the value of ICMS from the PIS/COFINS tax basis. The ruling will allow the Company the right to recover amounts unduly paid from August 2009 through December 2020. As a result of the favorable decision, Bunge recorded a pre-tax benefit of R$260 million (approximately $51 million) primarily in the fourth quarter of 2020 for the recovery of taxes, recognized in Net sales, consistent with how the expense was originally incurred. The recorded pre-tax benefit amount excludes interest, which will be recognized when related uncertainties around realization are resolved. Realization of these credits is expected to occur through credits applied to the Company's federal tax liability or through refund or reimbursement requests. The timing of realization of this benefit is dependent upon reimbursement of the amounts through precatory, a process for repayment through government issued certificates, or generation of federal tax liabilities eligible for offset. As of March 31, 2021, the Brazilian federal and state authorities have concluded examinations of the ICMS and PIS COFINS tax returns and have issued outstanding claims. The Company continues to evaluate the merits of each of these claims and will recognize them when loss is considered probable. The outstanding claims comprise the following:
(US$ in millions) | Years Examined | March 31, 2021 | December 31, 2020
ICMS | 1990 to Present | $ | 175 |  | $ | 191 |
PIS/COFINS | 2004 through 2016 | $ | 250 |  | $ | 208 |
Labor claims — The labor claims are principally against Bunge’s Brazilian subsidiaries. The labor claims primarily relate to dismissals, severance, health and safety, salary adjustments and supplementary retirement benefits. Civil and other claims — The civil and other claims relate to various disputes with third parties, including suppliers and customers. During the first quarter of 2017, Bunge received a notice from the Brazilian Administrative Council for Economic Defense ("CADE") initiating an administrative proceeding against its Brazilian subsidiary and two of its employees, certain of its former employees, several other companies in the Brazilian wheat milling industry, and others for alleged anticompetitive activities in the north and northeast of Brazil. This proceeding was put on hold due to a court injunction obtained by one of the defendants in a case related to the application of the statute of limitations. Additionally, in the second quarter of 2018, Bunge received a notification from CADE that it has extended the scope of an existing administrative proceeding relating to alleged anticompetitive practices in the Rio Grande port in Brazil to include certain of Bunge's Brazilian subsidiaries and certain former employees of those subsidiaries. Bunge is defending against these administrative proceedings and, in case it is unsuccessful, the proceedings can be further litigated in the judicial courts. Therefore, Bunge cannot at this time reasonably predict the ultimate outcome of the cases or sanctions, if any, that may be imposed. Guarantees — Bunge has issued or was a party to the following guarantees at March 31, 2021:
(US$ in millions) | Maximum Potential Future Payments
Unconsolidated affiliates guarantee (1) | $ | 269 |
Residual value guarantee (2) | 258 |
Total | $ | 527 |
(1) Bunge has issued financial and performance guarantees to certain financial institutions related to debt of certain of its unconsolidated affiliates. The terms of the guarantees are equal to the terms of the related financings and have maturity dates through 2034. There are no recourse provisions or collateral that would enable Bunge to recover any amounts paid under these guarantees. C ertain Bunge subsidiaries have guaranteed the obligations of certain of their affiliates and in connection therewith have secured their guarantee obligations through a pledge of certain of their affiliate's shares plus loans receivable from the affiliates to the financial institutions in the event that the guaranteed obligations are enforced. Based on amounts drawn under such debt facilities at March 31, 2021, Bunge's potential liability was $201 million, and has recorded a $12 million obligation related to these guarantees, inclusive of expected lifetime credit losses, which are determined based on historical financial information and are not expected to be material. (2) Bunge has issued guarantees to certain financial institutions that are party to certain operating lease arrangements for railcars, barges, and buildings. These guarantees provide for a minimum residual v alue to be received by the lessor at the conclusion of the lease term. These leases expire at various dates from 2021 through 2026. At March 31, 2021, no obligation has been recorded related to these guarantees. Any obligation recorded would be recognized in Current operating lease obligations or Non-current operating lease obligations. Bunge Limited has provided a guarantee to the Director of the Illinois Department of Agriculture as Trustee for Bunge North America, Inc. (“BNA”), an indirect wholly-owned subsidiary, which guarantees all amounts due and owing by BNA to grain producers and/or depositors in the State of Illinois who have delivered commodities to BNA’s Illinois facilities. In addition, Bunge Limited has provided full and unconditional parent level guarantees of the outstanding indebtedness under certain credit facilities entered into, and senior notes issued, by its 100% owned subsidiaries. At March 31, 2021, Bunge’s condensed consolidated balance sheet includes debt with a carrying amo unt of $6,254 million related to these guarantees. This debt includes the senior notes issued by two of Bunge’s 100% owned fi nance subsidiaries, Bunge Limited Finance Corp. and Bunge Finance Europe, B.V. There are largely no restrictions on the ability of Bunge Limited Finance Corp. and Bunge Finance Europe B.V. or any other Bunge subsidiary to transfer funds to Bunge Limited.

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