International trade and commercial transactions in Brazil: overview

A Q&A guide to the regulation of international trade and commercial transactions in Brazil.

The Q&A covers key matters relating to sale of goods contracts, including rules on formation, price and payment, delivery, passing of title and risk, variation and assignment, enforcement and remedies, exclusion of liability, choice of law and jurisdiction, and arbitration. It also provides an overview of the rules governing storage of goods, imports, trade remedies, exports and international trade restrictions.

To compare answers across multiple jurisdictions, visit the international trade and commercial transactions Country Q&A tool.

This Q&A is part of the International Trade and Commercial Transactions Global Guide. For a full list of jurisdictional Q&As visit www.practicallaw.com/internationaltrade-guide.

Contents

Recent trends

1. What are the recent trends affecting the regulation of international trade in your jurisdiction? Is your jurisdiction a member of the World Trade Organization (WTO)?

Recent trends

Brazil's economy has recently drifted into recession and the government is struggling to face this challenging situation. With new macroeconomic conditions, the industrial policy is shifting to a more liberal agenda.

Until recently, Brazilian trade regulations sought to protect the domestic industry through a high number of tariff exceptions regarding sensitive sectors and the frequent application of trade remedies. For example, the automotive sector is subject to a special regime, the Inovar-Auto incentive programme, which provides incentives to the national automotive industry, and which is currently being challenged by the European Union and Japan at the WTO (DS472 and DS397). Automobile manufacturers from third countries are subject to stricter regulations.

Due to the new economic situation, trade regulations are now focused on increasing the efficiency of customs controls and existing protective measures. Recent policies also focus on the promotion of exports, which benefit from the devaluation of the Brazilian real. The National Plan on Exports, launched in 2015, aims to:

  • Promote exports of goods and services.

  • Diversify exports.

  • Increase the value of exported products.

Recent corruption scandals have prompted investigation authorities to focus on trade compliance. Trade compliance has emerged as a major element in both customs regulations and the performance of companies in Brazil. Companies are now more likely to have their operations reviewed under customs laws, and compliant entities with strong compliance programme will be treated more favourably.

Trade agreements

Current governmental efforts include re-establishing Brazil as a leading recipient of foreign investment and expanding market access for Brazilian products.

Brazil signed new agreements for co-operation and facilitation of investment with several countries. This is a limited but welcomed development towards the international regulation of investment. Brazil is also expected to develop its links with the Organisation for Economic Co-operation and Development (OECD), to demonstrate Brazil's renewed favourable business environment.

Traditionally, Brazilian trade policy has been mostly focused on the expansion of the Southern Cone Common Market (Mercosur), in which Brazil is the most influential member regarding negotiations at the multilateral level, primarily at the WTO.

Mercosur has preferential agreements with most members of the Latin American Integration Association and other countries, including the Andean Community, Mexico, Colombia, Israel, India, Guiana, Suriname, Cuba and Peru. The free trade agreement between Mercosur and the Southern African Customs Union finally entered into force in 2016.

Brazil benefits from tariff preferences, although Mercosur regulations prevent Brazil from entering into new trade agreements individually.

The main international, regional and bilateral trade agreements to which Brazil is a party can be accessed at:www.desenvolvimento.gov.br//sitio/interna/interna.php?area=5&menu=405

Reform

Brazil recently ratified the Trade Facilitation Agreement and many administrative procedures are being reviewed to facilitate import and export operations. The Authorised Economic Operator programme entered into its second phase and now applies to both export and import operations. The single window programme is under development.

 

Contracts for the sale of goods

General

2. What is the legal system in your jurisdiction based on (for example, civil law (codified), common law or sharia law)?

Brazil's legal system is based on civil law.

Good faith is a key principle for the negotiation, interpretation and application of contract law and is largely applied by the courts in contractual disputes.

Most contractual regulations are guided by the pacta sunt servanda principle (that is, the principle that promises must be kept) and the parties' freedom to negotiate, in particular for commercial contracts between companies.

However, Brazilian law provides for contractual protections for consumers. In this regard, the Brazilian Consumer Defence Code (Federal Law 8078/90) contains special rules and mandatory obligations for businesses to prevent abusive contracts.

 

Formation

3. What domestic legislation and international rules apply to a sale of goods contract in your jurisdiction? Are standard international contractual terms commonly used?

Domestic legislation

Most civil and commercial relations, including sale of goods contracts, are regulated by the Brazilian Civil Code (Law 10406/2002). Some contracts are also subject to the Brazilian Consumer Code (Law 8078/1990).

International rules

Brazil is a party to the:

  • United Nations Convention on Contracts for the International Sale of Goods (Presidential Decree No. 8327/2014), which is the main regulation for international sales of goods.

  • Convention for the Unification of Certain Rules for International Carriage by Air (Montreal Convention) (Decree 5910/2006).

Standard contractual terms

The International Chamber of Commerce (ICC) International Commercial Terms (Incoterms) 2010 are accepted and used by Brazilian companies and Brazilian authorities (Resolution CAMEX 21/2011).

Other international standards are used, although less frequently, and mostly in high-value international transactions in the context of international arbitration, including the:

  • UNIDROIT Principles of International Commercial Contracts.

  • Uniform Customs and Practice for Documentary Credits.

  • Uniform Rules for Demand Guarantees.

 
4. What are the authority/capacity rules for entering contracts, for different commercial entities?

As a general rule, companies can enter into agreements through their managers. The management of companies must be vested in one or more individuals resident in Brazil and appointed in the articles of association or in a separate document. Managers may or may not be shareholders.

Once managers are legally appointed, they are free to enter into agreements with third parties on behalf of the company, provided that they act within the scope of their powers under the law and the company's articles of association or bye-laws.

 
5. What are the essential requirements to create a legally enforceable contract?

Substantive requirements

To be legally enforceable, a contract must:

  • Be executed by capable parties.

  • Have a lawful object.

  • Not be prohibited under Brazilian law.

A contract is formed when an offer made by one party is accepted by the other party. Offer and acceptance can both be made electronically (for example, through e-mail).

Formal requirements

Brazilian civil law gives an extensive autonomy to the parties in relation to the form a contract can take. A simple agreement of the parties, even oral, can produce legal effects. However, most companies will prepare a written contract to secure their interests and ensure the predictability of their contractual obligations.

A deed or notarisation are not required. Contracts in electronic form (for example, through e-mail, web-based or otherwise) are legally enforceable, provided that they comply with the substantive requirements established by law.

Contracts can be written in a foreign language but are not automatically enforceable in Brazil. In these cases, the contract must be translated into Portuguese by a sworn translator (sworn translators are registered before state Trade Boards).

 

Price and payment

6. If price provisions are not agreed by the parties, does local law impose requirements in relation to price (for example, the time, method and place of payment)?

If price provisions are not agreed by the parties (including references to criteria for price determination or official pricing), the price is that which is customarily charged by the seller.

Parties are free to negotiate the method of payment. For example, in most international sale agreements, payment is effected through letters of credit.

All payments in Brazil must be made in the national currency, the Brazilian real, except for import/export agreements and some other international operations, for which the use of a foreign currency is allowed.

 

Delivery

7. If delivery provisions are not agreed by the parties, does local law impose requirements in relation to delivery (for example, the time, method and place of delivery)?

Under Brazilian civil law, if delivery provisions are not explicitly agreed by the parties, the place of delivery is the place where the goods were located at the time of the sale.

The seller is not required to deliver the goods before payment (except in the case of payment by instalments). There are no specific rules on packing and removal of packaging materials, other than those negotiated under the contract, if any.

 

Passing of title and risk

8. If not agreed by the parties, when does title to the goods pass to the buyer?

As a general rule, title to the goods is transferred on delivery (tradição) of the goods to the buyer.

 
9. Are retention of title clauses enforceable in your jurisdiction? If so, what are the requirements to create a legally enforceable retention of title clause?

Retention of title clauses are enforceable under Brazilian civil law. If a retention of title clause is included in the contract, the buyer can have possession of the goods, but title is only transferred when the payment is completed. The buyer is responsible for all risks until title is transferred.

Retention of title clauses are only enforceable if they are in writing, and can only be enforced against third parties if they are registered at the Real Estate Registry Office of the place where the good is located.

In the case of default, the seller can legally enforce the retention of title clause and recover the good or claim for payment before the court.

In international sale of goods contracts, only the Brazilian party can carry out customs clearance for export for the purpose of returning the goods, and a foreign party cannot easily recover the goods without the co-operation of the Brazilian counterparty. In these cases, retention of title clauses can assist the seller in claiming recovery of the goods before the courts, but the seller should seek alternative guarantees that are easier to implement.

 
10. If not agreed by the parties, when does risk in relation to the goods pass to the buyer?

As a general rule, risk in relation to the goods is transferred on delivery (tradição) from the seller to the buyer. The risk is also transferred to the buyer if the buyer rejects the goods when they are made available, as agreed in the contract.

International sale agreements rely on the International Chamber of Commerce (ICC), International Commercial Terms (Incoterms) 2010 to define the passing of risk, which is allowed under Brazilian Customs Law. However, it is not recommended to use Incoterms in domestic sale agreements, as they do not define the transfer of risk with sufficient clarity.

 

Variation and assignment

11. What are the main ways and formalities to transfer contractual rights?

The transfer of contractual rights usually occurs by way of either:

  • Credit assignment. The benefit of an obligation can be completely or partially transferred to a third party, regardless of the debtor's consent. Credit assignment must be registered with a public notary.

  • Debt assignment. Debt assignment is only possible with the express consent of the creditor. The contract can provide that the creditor will consent to the transfer and that consent is presumed if the creditor remains silent.

Contract assignment is not specifically regulated, although it is possible to infer from Brazilian contractual principles that contract assignment is also permitted.

The transfer of contractual rights is impossible when either:

  • The performance of the contract is based on the personal qualities of the parties.

  • The parties agree that contractual rights cannot be transferred.

 
12. What are the main rules relating to waiver of contractual rights?

Waiver is a unilateral act by the holder of a contractual right. Waiver of contractual rights does not necessarily lead to the exercise of these rights by another person.

In general, all contractual rights can be waived. There are exceptions for rights that involve the public interest and rights that protect economically weak parties or contractually "inferior" parties (for example, employment rights and fundamental rights).

In adhesion contracts (that is, contracts where one party adhere to general and standard terms drafted by the other party), clauses that provide in advance for waiver of the adherent's rights are null.

 

Enforcement and remedies

13. What are the seller's obligations in relation to the description and quality of the goods?

Under Brazilian law, the seller is responsible for any concealed defects and is liable for damages caused to the buyer. There are no specific rules on the seller's obligations in relation to the description of the goods. However, to ensure predictability, it is common to include a clause specifying the description and quality of the goods.

As international sale agreements involve the presentation of customs documents containing information on the cargo, and the invoice is often the only contract between the parties, it is necessary to include a description and quality of the goods in the invoice in light of the importer's customs obligations.

 
14. What are the different types and legal status of contractual terms in your jurisdiction?

Not applicable (see Question 18).

 
15. What are the key rules on privity of contract and third party rights?

Under general principles of contractual law, a contract cannot create obligations for third parties. However, there are certain exceptions under the principle of social function, which may apply in sale of goods contracts. One important example is the possibility for consumers to bring claims against the producer or importer for damages caused by defective goods, even if those parties are not party to the sale contract.

 
16. What are the rules relating to invalidity, misrepresentation and mistake relating to contracts?

Brazilian contract law provides that a contract is null if one of the following applies:

  • It is executed by an absolutely incapable party.

  • Its object is illicit, impossible or indeterminate.

  • It does not comply with specific formalities agreed under the contract (if any).

  • The parties do not comply with an essential formal requirement.

  • It is intended to circumvent the application of the law.

  • It is deemed legally null or prohibited by law.

  • It is a simulated transaction (fraud).

In Brazil, a contract is valid if it is induced by a misrepresentation made in good faith.

 
17. What are the main performance and discharge rules relating to contracts?

Under Brazilian Law, a contract can be terminated in the following circumstances:

  • By mutual agreement of the parties, in accordance with the terms of the contract. Contracts can include a termination clause that sets out the conditions to terminate the contract.

  • Unilaterally, through notification to the other party and after a minimum term allowing the other party to recoup its investments.

  • On request of an injured party, following a breach.

Parties have a general duty to co-operate and to act in good faith. Both parties must use their best endeavours to perform the contract; parties cannot obstruct compliance by the other party. Even after termination of the contract, parties must not harm each other.

 
18. What are the main remedies and rules for losses and damages for breach of a sale of goods contract?

In Brazil, there is an objective and subjective dual liability regime. Under the Brazilian Civil Code (Article 927), the general rule is that liability is subjective. The party that commits an unlawful act and causes injury to the other party is liable for compensation, provided that a fault is established. The law specifies cases where objective liability (that is, regardless of fault or intent) can give rise to compensation.

The defaulting party is responsible for losses and damages caused to the other party (Brazilian Civil Code). The amount of compensation is based on both the:

  • Actual loss.

  • Future loss of profits.

An injured party can request either:

  • Specific performance of the contract.

  • Termination of the contract.

In both cases, the party can also request compensation for its losses and damages. In cases where non-performance is involuntary (for example, due to a fortuitous or force majeure event), the contract is terminated but compensation for losses and damages is not payable.

 
19. What are the buyer's remedies for breach of a sale of goods contract?
 
20. What are the seller's remedies for non-payment or late payment?
 

Exclusion of liability

21. What are the main rules relating to excluding contractual liability? Are exclusion clauses enforceable in your jurisdiction? If so, what are the requirements to create a legally enforceable exclusion clause?

Clauses limiting or excluding contractual liability are only valid if they do not alter the essence of the contract (that is, they do not fully exclude the liability of one party, so that only one party can be held liable for non-compliance).

Parties must comply with certain statutory limitations. For example, contracts governed by consumer law cannot exclude liability relating to the quality of the goods.

 

Choice of law

22. Will local courts recognise a choice of foreign law in a sale of goods contract? Are there any mandatory local rules that apply, despite a choice of foreign law?

Local courts generally recognise a choice of foreign law based on the principle of party autonomy, which is a fundamental principle of civil law.

International sale of goods contracts can refer to the law applicable to the contract. For example, parties can choose to apply the United Nations Convention on Contracts for the International Sale of Goods.

 
23. If the parties do not make a choice of law, what rules determine the law applicable to a sale of goods contract?

If the parties do not make a choice of law, the Law of Introduction to the Brazilian Law (Decree-Law No. 4657/1942) provides that the applicable law is that of the location where the agreement is executed (that is, Brazilian law applies to domestic sale of goods contracts). For contracts relating to real estate, the applicable law is that of the location of the property.

 

Choice of jurisdiction

24. Will local courts recognise a choice of foreign jurisdiction in a sale of goods contract? Are there any mandatory local rules that apply, despite a choice of foreign jurisdiction?

Local courts generally recognise a choice of foreign jurisdiction based on the principle of party autonomy, which is a fundamental principle of civil law.

 
25. If the parties do not make a choice of jurisdiction, what rules determine the jurisdiction applicable to a sale of goods contract?

If the parties do not make a choice of jurisdiction, the Law of Introduction to the Brazilian Law (Decree-Law No. 4657/1942) provides that the competent jurisdiction is that of the location where the agreement is executed. For contracts relating to real estate, the competent jurisdiction is that of the location of the property.

 

Arbitration

26. Are arbitration clauses commonly included in sales of goods contracts in your jurisdiction?

Brazilian companies are increasingly using arbitration as an alternative dispute resolution mechanism, and arbitration clauses are very frequent in sale of goods contracts. In particular, arbitration is the preferred method for resolving disputes in high-value international transactions.

Brazil recognises and enforces both domestic and foreign arbitration awards. Brazil is also a party to the Convention on the Recognition and Enforcement of Foreign Arbitral Awards 1958 (New York Convention).

 

Storage of goods

27. How is title to goods in storage protected and evidenced? Are warehouse receipts recognised as documents of title in your jurisdiction?

Title over goods stored in Brazil can be evidenced through a warehouse receipt (conhecimento de deposito) issued by the company operating the warehouse. The warehouse receipt is often issued with a warrant and both are negotiable instruments. Both documents must be presented to take possession of the stored goods.

 
28. What conditions and formalities must warehouse receipts comply with?

A warehouse receipt must include the following information:

  • Name of the warehouse company.

  • Name, occupation and domicile of the depositor or designated third party.

  • Place and term of the deposit.

  • Place where the goods in storage will be transferred to (if any).

  • Nature and quantity of goods in storage.

  • Details of the insurer and insurance value.

  • Declaration of tax and other fiscal charges, and all charges and expenses to which the goods are subject.

  • Date when the storage starts.

  • Date of the receipt.

  • Signature of the persons responsible for the goods.

 
29. Are other interests over goods in storage recognised?

Not applicable.

 

Imports

Customs authority

30. What is the authority responsible for enforcing customs laws and regulations? Are certain goods subject to specific examination procedures?

The Brazilian Internal Revenue Service (Receita Federal do Brasil) (RFB) is the main customs authority. It is responsible for enacting technical regulations and enforcing tax and customs laws. The RFB has broad powers to investigate non-compliance with customs laws, including physical inspection of goods and inspection of premises of importing companies. The RFB can impose penalties in cases of non-compliance.

 

Import duties, tariffs and rates

31. What are the main customs import tariffs and duties?

General tariffs and rates

Brazil's customs duty rates are defined by the Southern Cone Common Market's (Mercosur) Common External Tariff (TEC).

The customs duty rates applicable in Brazil are a result of Mercosur's legal framework and political consensus, as agreed in Mercosur's trade policies, as well as the systematic update of TEC. Mercosur is a customs union, and imports from third countries are subject to the same tariffs in any of the Mercosur member states, usually varying between 0% and 35%.

However, there are exceptions to TEC, so that Mercosur members can modify the rate of duties unilaterally in certain circumstances. Currently, Brazil can temporarily modify the applicable customs duties as follows:

  • Brazil can reduce the applicable tariffs in cases of supply and demand discrepancy, such as shortage of products available regionally, in accordance with Resolution GMC 08/2008.

  • Brazil can establish a list of exception for 100 products, with tariffs that are higher or lower than those applicable under TEC, in accordance with Decision CMC 58/2010.

  • Brazil can reduce by 2% the tariffs applicable to capital and computing goods that are not produced locally, in accordance with Decision CMC 65/12.

Preferential tariffs

Mercosur is part of many trade agreements that grant preferential tariffs for goods from certain countries and negotiated products.

The special and preferential tariffs arising from free trade agreements and exceptions to the Mercosur Common Tariff are listed on the website of the Ministry of Development, Industry and Foreign Trade (Ministério do Desenvolvimento, Indústria e Comércio Exterior) (www.desenvolvimento.gov.br/sitio/interna/interna.php?area=5&menu=405 and www.desenvolvimento.gov.br/sitio/interna/interna.php?area=5&menu=3361).

 

Non-tariff barriers to imports

32. Are there non-tariff barriers to imports into your jurisdiction?

Brazil is a member of the WTO and participates in the main organisations that are responsible for setting international standards, such as the:

  • International Standardization Organization, regarding technical barriers.

  • World Organisation for Animal Health.

  • International Plant Protection Convention.

  • Codex Alimentarius within the Food and Agriculture Organization, regarding sanitary and phytosanitary barriers.

The Brazilian Government considers that most technical rules it applies are based on international standards. Brazil has a series of import licensing requirements designed to control the entry of certain products that are subject to pre-shipment approval.

There are no specific requirements for country of origin marking. All packages must be identified for tracking and their information reflected in the customs documents (that is, invoice, bill of lading, packing list, and so on). Information included in the documents must reflect the information contained on the packaging (such as weight, quantity, origin, manufacturer, and so on). Origin will be checked by the customs authorities based on the documentation presented by the importer.

Brazil applies tariff quotas under preferential agreements and temporary alterations to the Mercosur Common External Tariff (see Question 31, General tariffs and rates), and non-tariff quotas for products subject to trade remedies (such as safeguards).

Some governmental programmes require the use of local goods and services for the granting of tax benefits, and the application of preferential margins in bidding processes. These requirements can negatively affect imports of similar products or services.

 
33. Can customs decisions and import restrictions be challenged?

Customs decisions can be challenged before judicial and administrative authorities.

Interested parties can submit a petition to the Administrative Council of Tax Appeal to review unfavourable customs decisions. The venue of the review will depend on the nature of the customs decision.

In addition, the Brazilian federal courts are competent to review the customs decisions and rulings of the Internal Revenue Service (Receita Federal do Brasil). Therefore, interested parties can bring a case before Brazilian federal courts to evaluate, review and decide on the legality of customs decisions, and to amend these decisions.

 

Trade remedies

Regulatory framework

34. What are the main regulations and authorities responsible for investigating and deciding on trade remedies?

Regulatory framework

The WTO rules on trade remedies are part of Brazilian law and are considered when enacting new domestic legislation on trade remedies (for example, anti-dumping regulations such as Decree 8058/2013).

The main Brazilian trade remedies laws and regulations are:

  • Decree 1,355/1994, which implements the Final Act of the Uruguay Round that incorporated the results of the multilateral trade negotiations of the General Agreement on Tariffs and Trade (GATT).

  • Decree 8,058/2013, which regulates the administrative procedures for the investigation and application of anti-dumping measures.

  • Decree 1,751/1995, which regulates the administrative procedures for the investigation and application of countervailing measures.

  • Decree 1,488/1995, which regulates the administrative procedures for the investigation and application of safeguard measures.

  • Resolution CAMEX 13/2012, which creates the Technical Group for Evaluation of Public Interest (GTIP) with the purpose of analysing the suspension, alteration and non-application of provisional and definitive anti-dumping measures on grounds of public interest.

  • Resolution CAMEX 27/2015, which regulates the procedure before the GTIP.

Brazilian trade remedies legislation can be accessed on the website of the Ministry of Development, Industry and Foreign Trade (Ministério do Desenvolvimento, Indústria e Comércio Exterior) (MDIC) (www.desenvolvimento.gov.br//sitio/interna/interna.php?area=5&menu=231).

Regulatory authority

The Department of Trade Defence (Departamento de Defesa Comercial) (DECOM) is the Brazilian authority responsible for conducting trade remedies investigations. DECOM is part of the Secretariat of Foreign Trade (Secretaria deComércio Exterior) within the MDIC. DECOM can conduct on-site verifications on the premises of the domestic industry, importers and selected exporters. Limiting access to premises can have an adverse impact on the outcome of the investigation.

DECOM also recommends the application of trade remedies to the Chamber of Foreign Trade (Camara de Comércio Exterior) (CAMEX).

CAMEX is a collegiate body chaired by the MDIC and comprised of the Ministries of Finance, Civil Office, Foreign Affairs, Agriculture, Planning and Agricultural Development, and is responsible for deciding on the imposition of trade remedies based on the recommendations of DECOM.

The Brazilian Internal Revenue Service (Receita Federal do Brasil) is the customs and tax authority responsible for the:

  • Collection of duties arising from the imposition of trade remedies.

  • Enforcement of CAMEX's decisions.

 

Investigations and enforcement

35. What are the requirements and procedure to start trade remedies investigations?

In Brazil, trade remedies investigations are initiated by way of a written complaint submitted by domestic producers (that is, the domestic industry or an association representing the domestic industry) before the Department of Trade Defence (DECOM). It is necessary to show sufficient support from domestic producers of the similar product. The persons supporting the petition must represent both:

  • More than 25% of the total national production.

  • More than 50% of all producers that expressly supported the petition.

In anti-dumping and subsidies investigations, the written complaint must present evidence that:

  • There is dumping or subsidies of the products imported.

  • The domestic industry is suffering injury as a result of the imports.

  • There is a causal link between the imports and the injury.

In safeguards investigations, the written complaint must present evidence of:

  • An increase in imports.

  • A serious injury or threat of serious injury to the domestic industry.

  • A causal link between the imports and the injury.

After the investigation is initiated, all interested parties, including exporters and importers, have access to the administrative process conducted by DECOM. This includes the right to present submissions and oral and written arguments during hearings.

 

Appeals

36. Is there a right of appeal against the authority's decision? What is the applicable procedure?

Parties have a right to appeal against decisions of the Department of Trade Defence (DECOM).

During a trade remedy investigation, interested parties can request DECOM to re-evaluate its decisions through petitions and during hearings. After the conclusion of the investigation, interested parties can appeal against DECOM's decisions before the Chamber of Foreign Trade (CAMEX) to reconsider the decision to impose trade remedies.

The decisions of DECOM and CAMEX can also be challenged before the judicial and administrative authorities.

In practice, few cases are successful. Interested parties are usually more likely to be successful if they co-operate with DECOM during an investigation. Co-operation allows interested parties to have more control over the outcome of the investigation and to ensure that any duties imposed are based on accurate data.

Although this is not considered as an appeal procedure, interested parties can also request the Technical Group for Evaluation of Public Interest (GTIP), as a technical body of CAMEX, to suspend or amend the imposition of trade remedies on grounds of public interest.

 

Exports

Regulatory framework

37. What are the main requirements to export goods from your jurisdiction?

To export goods from Brazil, a company must be enrolled with the Brazilian Internal Revenue Service (RFB). This enrolment, known as RADAR, provides access to the integrated foreign trade system (SISCOMEX). All import and export transactions in Brazil must be made through SISCOMEX.

To export a product, a company must present a series of documents in compliance with customs requirements, as follows:

  • A commercial invoice issued by the Brazilian exporter, presenting information on the product, its price and terms of negotiation.

  • The packing list, containing information about the goods, such as net weight, gross weight, packaging, value per unit, volume and specific contents (the Brazilian exporter should contact the importer to verify applicable requirements in the importing country).

  • Before submitting the exportation register (RE) to SISCOMEX, the exporter must verify whether it is necessary to request a prior export approval, as identified in the tariff classification of the goods to be exported. Several authorities may be competent to approve the exportation of a good (see Question 38).

  • A bill of sale (nota fiscal) must be issued. The bill of sale must accompany the goods throughout the operation, from exit from the Brazilian exporter facility to the actual exportation customs clearance.

  • The transporter hired by the parties must then issue a bill of lading, a document that will specify the type, quantity and destination of the goods and attest to their shipment to the place of destination (indicated in the commercial invoice).

  • The RE and the other export documents must be prepared before registration of the export declaration (DE) and the shipping of the goods. The DE formally initiates the exportation customs clearance, to be processed through SISCOMEX. Every RE must be registered with a respective DE, although a DE can contain more than one RE. The DE must indicate (among other things) the:

    • number of the registered RE(s);

    • identification of the exporter's facilities;

    • number of the bill of sale;

    • quantity, volume, net and gross weight of the exported goods;

    • total value of the operation; and

    • route negotiated with the foreign importer.

The exportation customs clearance is processed after registration of the DE with SISCOMEX and the presentation of the export documents (invoice, packing list, and so on) to the RFB. The RFB will analyse the data and can request further information to approve the operation.

Brazil also has a set of export control requirements based on the use and classification of goods. These requirements must be reviewed before any operation, in order to obtain the necessary authorisation/permit. See Question 38.

The list of products subject to prior authorisation/permit and relevant authorities is available at: http://portal.siscomex.gov.br/informativos/bens-sujeitos-a-tratamento-administrativo.

 
38. Are certain categories of goods subject to specific export quotas, restraints or other controls?

Goods subject to specific export controls

Many goods are subject to the Brazilian export controls regime, which provides for the assessment and approval by governmental bodies of both the company and the goods to be exported.

In particular, the Brazilian export controls regime regulates the export of:

  • Goods and services with potential military applications.

  • Goods or related services with potential application in the development of weapons of mass destruction, whether nuclear, chemical or biological, and their delivery vehicles, such as missiles.

The Brazilian export controls regime applies to:

  • Sensitive goods. These are goods involved in the production of weapons, dual-use goods and goods used in the nuclear, chemical or biological fields.

  • Dual-use goods. These are products that can be used for purposes of war, even if they have been developed for civil applications.

  • Services related to sensitive goods. These are services related to the supply of information or technology for the development of sensitive goods.

Sensitive goods and services are classified into four main categories (in accordance with their international classification):

  • Nuclear.

  • Chemical.

  • Biological.

  • Projectile.

Exporters of sensitive goods must receive authorisation before starting preliminary negotiations on exports, and must comply with legal requirements, including when participating in international bids and exhibitions.

The exportation of sensitive goods and services related to sensitive goods is subject to prior approval by the competent authorities (see below, Regulatory authorities), which includes presenting documents evidencing their final use (such as the "end-use certificate").

The administrative procedure for the approval of export authorisations is confidential.

When deciding on the authorisation to export, the Brazilian authorities take into account political and strategic considerations. The authorities can require the presentation of contracts related to the export operation and other related documents. An export authorisation is normally valid for two years.

After receiving the authorisation, the company must follow the general exportation procedures. Therefore, copies of contracts and other documents may be required to approve the exportation register (RE), and, consequently, the exportation. See Question 37.

The list of products subject to special controls is contained in Annexe XVII to the Department of Operations for Foreign Trade (DECEX) Ordinance No. 23 of 14 July 2011 (http://mdic.gov.br//arquivos/dwnl_1398888675.pdf).

Regulatory authorities

Depending on the classification of sensitive goods, the following governmental agencies may participate in export controls and review applications for export registration:

 

Penalties

39. What are the consequences of non-compliance with export regulations?

Companies and their employees must fully comply with Brazilian export controls. Non-compliance with the legal requirements of the Brazilian export controls regime can result in the imposition of various penalties, including:

  • Warnings, for minor breaches.

  • Fines of up to twice the value of the operation.

  • Forfeiture of the goods.

  • Suspension of the right to export, from six years up to ten years.

  • Permanent prohibition from performing foreign trade operations.

The last four penalties above can be applied cumulatively in administrative proceedings, depending on the seriousness of the violation and the circumstances of the case. Liability for violations does not depend on intent or on the nature and extent of the effects of the violation.

Employees of the companies or individuals responsible for non-compliance are subject to criminal sanctions, including terms of imprisonment of one to four years.

Other commonly applied customs penalties include:

  • Forfeiture of the goods, or a fine equivalent to the customs value of the goods (if already consumed or exported).

  • Fines, including a fine equivalent to 30% of the customs value of the goods, for failure to obtain an export or import licence.

 

International trade restrictions

Trade sanctions

40. Are there specific restrictions on trade with certain jurisdictions?

Brazil establishes lists of countries that are subject to restrictions on imports and/or exports for certain goods.

Brazil imposes restrictions or embargoes on exports strictly based on the decisions of the United Nations (UN) and other international organisations. Brazil does not generally impose embargoes or economic sanctions unilaterally.

There are no individuals or specific companies subject to financial sanctions.

Currently, Brazil has restrictions or embargoes against the following countries and products (Ordinance 23/2011):

  • For importations into Brazil:

    • Islamic Republic of Iran: weapons or similar materials (although the UN sanctions have been lifted by decree, changes to Brazilian law have not yet been fully implemented);

    • North Korea: combat cars, armoured combat vehicles, large gauge artillery systems, combat aircraft, attack helicopters, warships, missiles or missile systems, and items, materials, equipment, goods and technology that can contribute to North Korea's programmes related to nuclear activities, ballistic missiles or other mass destruction weapons, as determined by the UN Security Council or its Committee (especially those listed in the following UN documents: S/2006/814 e, S/2006/815, S/2006/816, INFCIRC/254/Rev.9/Part 1a e and INFCIRC/254/Rev.7/Part 2);

    • Eritrea: arms or related materials;

    • Libya: arms or related materials; and

    • Somalia: charcoal.

  • For exportations from Brazil:

    • Iraq: weapons and related materials, except if required by the Authority of the Occupying Powers under unified command;

    • Liberia: weapons and armaments, including ammunition, military vehicles, paramilitary equipment and replacement parts for such equipment;

    • Somalia: weapons and military equipment, with exceptions provided in Decree 7.869 of 19 December 2012;

    • Sierra Leone: weapons and armaments, including ammunition, military vehicles, paramilitary equipment and replacement parts for such equipment, with exception for exports to the Sierra Leone's Government;

    • Côte d'Ivoire: weapons or related materials, in particular military airplanes and military equipment;

    • Iran: any items, materials, equipment, goods and technology that may contribute to activities related to enrichment of uranium, reprocessing and projects of heavy water, as well as to nuclear weapons vectors, combat vehicles, armoured fighting vehicles, large calibre artillery, military airplanes, military helicopters, warships, missiles or missile systems and related materiel (including replacement parts) (although the UN sanctions have been lifted by decree, changes to Brazilian law have not yet been fully implemented);

    • North Korea: battle tanks, armoured combat vehicles, large calibre artillery systems, military airplanes, military helicopters, warships, missiles or missile systems, luxury goods, and items, materials, equipment, goods and technology that may contribute to the North Korean programmes related to nuclear activities, ballistic missile or other weapons of mass destruction, as determined by the UN Security Council or by its Committee (in particular those listed in the following UN documents: S/2006/814, S/2006/815, S/2006/816, INFCIRC/254/Rev.9/Part 1a and INFCIRC/254/Rev.7/Part 2);

    • Congo: weapons and related materials;

    • Sudan: weapons and related materials of all types, including weapons and ammunition, military vehicles and equipment, paramilitary equipment and replacement parts;

    • Eritrea: weapons, military equipment, weapons and related materials of all sorts, including weapons and ammunition, military and paramilitary vehicles and equipment and replacement parts; and

    • Libya: weapons or related materials of all types, including weapons and ammunition, military and paramilitary vehicles and equipment and replacement parts.

In addition, Brazil has a set of export controls based on the specific use and classification of the goods (see Question 38).

 
41. What is the authority responsible for imposing trade restrictions?

The Brazilian Internal Revenue Service (RFB) and the Secretariat of Foreign Trade are the authorities responsible for the imposition of trade restrictions.

The RFB is in charge of controlling and enforcing trade regulations and is the main authority responsible for imposing sanctions for non-compliance with trade restrictions.

 
42. What are the consequences of non-compliance with trade restrictions?

Violations of trade restrictions are subject to the following penalties, which can be applied separately or cumulatively:

  • Forfeiture of the goods, or a fine equivalent to 100% of the customs value of the goods (if the goods have already been consumed or exported).

  • Fines, including a fine equivalent to 30% of the customs value of the goods for failure to obtain an export or import licence.

  • Administrative sanctions, including suspension from the RADAR (that is, the enrolment required to carry out all import and export operations in Brazil (see Question 37).

  • Criminal sanctions, including terms of imprisonment.

Responsibility for violations does not depend on intent or on the nature and extent of the effects of the violation.

 
43. Are businesses subject to specific compliance requirements? What practical steps should a business take to ensure compliance with trade restrictions?

All Brazilian companies and individuals domiciled or with residency in Brazil must comply with customs and trade regulations. Trade restrictions are mostly targeted at preventing companies conducting transactions relating to certain products or countries (see Question 40).

Due to the broad applications of sanctions on both companies and their employees, most entities operating in Brazil have developed strong trade compliance programmes and conduct regular staff training sessions. Trade compliance programmes are regarded as important instruments to reduce exposure to customs penalties, not only for those relating to trade sanctions but more generally for those relating to non-compliance with the extensive import and export regulations and anti-corruption framework.

 

Foreign trade barriers

44. What is the procedure for local exporters to complain against foreign trade barriers contrary to the WTO or other trade agreements?

Brazilian exporters can submit a complaint against foreign trade barriers affecting Brazilian products to the National Institute of Metrology, Quality and Technology and the Department of International Negotiations of the Ministry of Development, Industry and Foreign Trade. The complaint can be submitted online, at: www.inmetro.gov.br/barreirastecnicas/denuncie_cadastro.asp or www.desenvolvimento.gov.br/sitio/sistema/barreiras/.

Following complaints against trade barriers affecting Brazilian products, an investigation may be initiated to gather information on the measures. If sufficient evidence is found, Brazil may enter into diplomatic negotiations to remove the barrier or initiate dispute resolution proceedings at the regional or WTO levels.

 

The regulatory authorities

Brazilian Internal Revenue Service (Receita Federal do Brasil) (RFB)

W http://idg.receita.fazenda.gov.br/

Principal responsibilities. The RFB is the main customs authority, and is responsible for enacting technical regulations and enforcing tax and customs laws.

Department of Trade Defence (DECOM)

W www.desenvolvimento.gov.br/sitio/interna/index.php?area=5

Principal responsibilities. DECOM is the Brazilian investigating authority in charge of conducting trade remedies investigations.

Chamber of Foreign Trade (CAMEX)

W www.camex.gov.br/

Principal responsibilities. CAMEX is a collegiate body chaired by the Ministry of Development, Industry and Foreign Trade and composed of the Ministries of Finance, Civil Office, Foreign Affairs, Agriculture, Planning and Agricultural Development. It is responsible for deciding on the imposition of trade remedies in Brazil based on the recommendations of DECOM.



Online resources

Official Presidency website

W www4.planalto.gov.br/legislacao

Description. This website contains the legal texts of most enacted laws in Brazil.

Ministry of Development, Industry and Foreign Trade (MDIC)

W www.desenvolvimento.gov.br/sitio/interna/interna.php?area=1&menu=3296

Description. This is the official website of the MDIC, which provides access to many important executive rules regarding international trade.

Brazilian Internal Revenue Service (Receita Federal do Brasil) (RFB)

W http://normas.receita.fazenda.gov.br/sijut2consulta/consulta.action

Description. This is the official website of the RFB, which contains most tax and customs legislation.



Contributor profiles

Vera Kanas, Partner

TozziniFreire Advogados

T +55 11 5086 5314
F +55 11 5086 5555
E vkanas@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer

Areas of practice. International trade.

Non-professional qualifications. Diploma in business management, Business School São Paulo, 2007; PhD in international law, University of São Paulo (USP), 2004; Masters in international economic law, University of Paris-I Panthéon-Sorbonne, France, 2002; Law degree, Law School of the University of São Paulo (USP), 1998

Languages. English, French, Spanish

Professional associations/memberships.

  • Consultant to the Ministry of Foreign Affairs for matters relating to WTO dispute settlement and the environment.
  • Founding member of the Trade Negotiations Group (GNC), co-ordinated by the Brazilian mission in Geneva, the Institute for International Trade Negotiations (ICONE) and the Industry Federation of São Paulo (FIESP).
  • Founding member of the Study Group of Dispute Settlement (NESC), organised by the Brazilian mission in Geneva and São Paulo School of Business Administration (FGV-SP).
  • Member of the official Brazilian delegation in the Conference of the Parties on Climate Change, COP-6 (The Hague, 2000) and COP-10 (Buenos Aires, 2004).

Publications

  • "Agricultural Law in Brazil: Overview", Global Agricultural Law, Sweet & Maxwell/Thomsom Reuters, 2015 (co-author).

  • "Trade and Environment and Compliance in the Disputes involving Brazil at WTO", Solução de Controvérsias: O Brasil e o Contencioso na OMC (Dispute Resolution: Brazil and Litigations in the WTO) , São Paulo: Saraiva, 2008, ed. I and II.

  • "Proteção dos Investimentos no NAFTA" (Protection of Investments in the NAFTA), Regulamentação Internacional dos Investimentos: algumas lições para o Brasil (International Regulation of Investments: a few lessons for Brazil), São Paulo: Aduaneiras, 2007.

  • "Meio Ambiente e Negociações Internacionais" (Environment and International Deals), O Brasil e os Grandes Temas do Comércio Internacional (Brazil and the Great Themes of International Law), São Paulo: Lex Editora, 2005.

  • "A Proteção Ambiental no NAFTA" (Environmental Protection in the NAFTA), O Sistema de Comércio Internacional e o Novo Milênio (The International Trade System and the New Millennium), organised by Alberto do Amaral Júnior, 2002.

  • Business Guide to Trade Remedies in Brazil, publication by the International Trade Centre (UNCTAD/WTO), Geneva, 2005 (co-author).

Felipe de Andrade Krausz, Associate Lawyer

TozziniFreire Advogados

T +55 11 5086 5023
F +55 11 5086 5555
E fkrausz@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer

Areas of practice. International trade.

Non-professional qualifications. LLM in international law candidate, Georgetown University Law Center; Master in international law candidate, Law School of the University of São Paulo (USP); Law Degree, Law School of the University of São Paulo (USP), 2012

Languages. English, Portuguese

Professional associations/memberships.

  • Member of the Customs Law Commission of the Brazilian Bar (OAB/SP).
  • Member of the Maritime Law Commission of the Brazilian Bar (OAB/SP).

Publications

  • "Brasil e Venezuela aprofundam integração" (Brazil and Venezuela improve integration), 2014. Published by the Brazilian newspaper "Jornal Brasil Econômico".

  • "Getting the Deal Through – Trade & Customs, Brazil", 2014. Published by Thomson Reuters.

  • "Projeto Releitura dos Acordos da OMC" (Reviewed WTO Agreements Project), 2012. Published by FGV.

Carolina Müller, Associate Lawyer

TozziniFreire Advogados

T +55 11 5086 5089
F +55 11 5086 5555
E cmuller@tozzinifreire.com.br
W www.tozzinifreire.com.br

Professional qualifications. Brazil, Lawyer

Areas of practice. International trade.

Non-professional qualifications. PhD in international law candidate, University of São Paulo (USP); Master in international law and international relations, University of Paris-II Panthéon-Assas, 2010; Maîtrise in international law, University of Paris II Panthéon- Assas, Paris, 2009; Law Degree, Law School of the University of São Paulo (USP), 2010

Languages. English, French, Spanish

Publications

  • "The Missing Link between the WTO and the IMF" , Journal of International Economic Law, v. 16, n. 2, 2013 (co-author).
  • "Market and Non-Market Economies at the WTO: The hybrid case of China" Latin American Journal of International Trade Law, v. 1, i. 2, 2013 (co-author).

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