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1 Brazil FAQs

2 WHY BRAZIL GATEWAY Why should I expand my business to Brazil? With the world s sixth largest economy and 201 million consumers, Brazil is an enticing opportunity for companies looking to expand internationally. With Brazil s GDP approaching $2.5 trillion, the expectation of doubledigit growth, and the country s role as host of the 2014 FIFA World Cup as well as the 2016 Olympic Summer Games, companies cannot afford to ignore Brazil s business opportunities. Memphis Many exporters have tried to enter the Brazilian marketplace and failed because they didn t understand Brazil s clearance process and other aspects that are unique to conducting trade in this country. At FedEx, we re using our expertise, network, and relationships to help our customers expand into Brazil and succeed. In this document, we answer the questions that exporters to Brazil ask most frequently. BRAZIL For more specific help with your company s expansion into Brazil, contact your FedEx representative. Sao Paulo Santiago Buenos Aires 2

3 WHY BRAZIL GATEWAY Where is the FedEx gateway in Brazil? Viracopos International Airport (VCP) is the gateway for FedEx in Brazil. It is located 14km (8 miles) from downtown Campinas, Brazil, and 90km (58 miles) from the city of São Paulo. Americana RODOVIA ANHANGÜERA RODOVIA GENERAL MILTON TAVARES - SP332 Artur Nogueira Holambra Cosmópolis Jaguariúna RODOVIA ADEMAR DE BARROS Santo Antonio de Posse Pedreira The airport is convenient to three major highways: Santos Dumont, Bandeirantes, and Anhanguera. Santa Barbara d Oeste Nova Odessa Sumaré Paulinia VCP has become one of the main connection points in Latin America with an air cargo import/export terminal that covers 81,000 square meters. Campinas is one of Brazil s leading centers for technology and home to several major universities. Many high-tech and multinational companies are located in and around Campinas, including several Fortune 500 companies Caterpillar, 3M, Rhodia, Motorola, HP, Flextronics, Foxconn, Pirelli, GEVISA, Ford, Eaton, Delphi, Dell, Bosch, Tetra Pak, Valeo, General Motors, Volkswagen, Honda, IBM, Kodak, Embraer, Johnson & Johnson, LG, and Toyota. SP 101 Monte Mor Hortolândia Indaiatuba RODOVIA SANTOS DUMONT AEROPORTO INTERNATIONAL DE VIRACOPOS Itupeva CAMPINAS Valinhos RODOVIA ANHANGÜERA Vinhedo RODOVIA DOS BANDEIRANTES São Paulo Louveira RODOVIA DOM PEDRO Itatiba AEROPORTO DE GUARULHOS AEROPORTO DE CONGONHAS/SP 3

4 EXPRESS VS. FORMAL EXPRESS FORMAL Two clearance regimes Which applies How goods move What are the clearance regimes in Brazil? There are two types of customs clearance regimes under Brazil Customs regulations: 1. Express clearance 2. Formal clearance Here s how they compare: Item Express Formal Product Description Documents & samples only, no commercial Any product intended for resale value, not intended for resale Product for Resale No Yes Declared Value for Customs Limit Maximum $3,000 USD No limit, any value Duties & Taxes 60% import tax; 18% VAT (CIF if transportation charged to a Brazilian account) Import tax based on product classified under Harmonized System; 18% VAT (CIF if transportation charged to a Brazilian account) Clearance Facility FedEx warehouse Government warehouse Clearance Performed by FedEx team members Recipient s customs broker Clearance Time Customs Anvisa (consumer health) MAPA (agriculture) 98% on same day of flight arrival 1 to 5 business days 1 to 2 business days 1 to 5 business days 1 to 5 business days 1 to 5 business days 4

5 EXPRESS VS. FORMAL EXPRESS FORMAL Two clearance regimes Which applies How goods move How do I know which regime applies to my shipment? The Express clearance regime applies to the following shipments and conditions only: Documents with NO commercial value Samples with NO resale purpose Documents and samples with declared value for Customs of less than $3,000 USD Personal shipments The Formal clearance regime applies to the following shipments and conditions: Documents with commercial value Any type of product and quantity for resale purpose Products of any declared value for Customs 5

6 EXPRESS VS. FORMAL EXPRESS FORMAL Two clearance regimes Which applies How goods move How does the regime determine how my shipments move into Brazil? Upon inbound flight arrival, containers and products are sent to the following warehouses at VCP: FedEx warehouse Express clearance Shipments containing documents and samples with NO resale purpose, and with maximum declared value for Customs of less than $3,000 USD for each one. FedEx Facility Express Clearance DVC < $ 3K Gov Facility Formal Clearance DVC - any $ Government warehouse Formal clearance FedEx International Express Freight, airport-to-airport (023 air waybill) Express shipments containing any product with NO declared value for Customs limit. They must be marked as BSO on the air waybill and labeled accordingly to reflect VCPRT on URSA Code. Shipments with Cost, Insurance and Freight (CIF) of more than $3,000 USD must be designated either BSO from origin or Commercial Shipment for Resale. Caged Inspection Cleared Converted Formula GIG GRU Inspection VCP Private WHS VCP-SAOA VCP-VCPA VCP-NNP VCP-RIO 6

7 EXPRESS VS. FORMAL EXPRESS FORMAL How it works Clearance times Required paperwork Why shipments are held Delivery Duty Paid How does the Express customs clearance regime work? Duties & Taxes Customs duties & taxes are charged based on declared value for Customs if transportation charge is billed to a non-brazilian account and based on CIF if transportation charges are to be billed to a Brazilian account,regardless of the type of product(s). Values and calculation: 60% import tax applied over the declared value for Customs 18% VAT (state tax) applied over the declared value for Customs, plus import tax Example: Shipment with declared value for Customs = $1,000 USD Import tax 60% = $600 USD VAT 18% = $288 USD Total duties & taxes: $888 USD Customs Clearance Facility FedEx team members perform the customs clearance at the FedEx warehouse. It is a bonded facility certified by Brazil Customs. Customs and other government agencies selection process is based on the following factors: Declared value for Customs Description of product(s) Quantity of product(s) Weight of entire shipment 7

8 EXPRESS VS. FORMAL EXPRESS FORMAL How it works Clearance times What are the clearance times for Express clearance? Required paperwork Why shipments are held Clearance Times Customs Clearance Anvisa Agency Clearance MAPA Agency Clearance Same-day clearance for 98% Usually requires at least 5 business days Usually requires at least 2 business days of inbound Delivery Duty Paid Typical Delay Causes 1% convert to Formal clearance; 1% held for more info Product & shipment registration; notarized documentation from recipient Additional paperwork required from recipient 8

9 EXPRESS VS. FORMAL EXPRESS FORMAL How it works Clearance times Required paperwork Why shipments are held Delivery Duty Paid What paperwork is required for Express clearance? Customs Clearance Anvisa Agency Clearance Agriculture Agency Clearance FedEx Extended Tracking Number (ETN) air waybill Commercial Invoice FedEx ETN air waybill Commercial Invoice FedEx ETN air waybill Commercial Invoice Guia de Recolhimento da União (GRU) provided only by recipient Special form to be submitted by recipient Special form to be submitted by recipient 9

10 EXPRESS VS. FORMAL EXPRESS FORMAL How it works Clearance times Required paperwork Why shipments are held Delivery Duty Paid Why are shipments held during Express customs clearance? Shipments can be held for four reasons: Missing recipient s tax ID Customs selection for additional required paperwork/information - Can also be converted to be cleared under Formal clearance regime Anvisa waiting for paperwork and product registration in its website by recipient Agriculture paperwork required by recipient Checks: Completed checks can only be sent to certain authorized organizations in Brazil. If they are not sent to an authorized organization, they will be returned to the origin. Cage Reason Anvisa AGRI Customs Tax ID 10

11 EXPRESS VS. FORMAL EXPRESS FORMAL How it works Clearance times Required paperwork Why shipments are held Delivery Duty Paid If the shipper can arrange it, can FedEx support Delivery Duty Paid (DDP) shipments in Brazil with Express clearance? Yes. In Brazil DDP only applies to Express clearance. Duties & taxes can be billed to the shipper s account number because Express clearance does not require a customs broker. If the shipper doesn t have a FedEx account number, duties & taxes will be due for payment upon delivery. 11

12 EXPRESS VS. FORMAL EXPRESS FORMAL Formal clearance regime How does the Formal clearance regime work? Required paperwork Is BSO required? Preparing a BSO shipment Delay at storage Delivery Duty Paid Formal Clearance All shipments requiring Formal clearance must be prepared as BSO (Broker Select Option). Customs Duties & Taxes Duties & taxes are based on Cost, Insurance and Freight (CIF) charges of products classified by the Harmonized System (HS) Codes. Duties & taxes calculations are based on declared value for Customs if transportation charges are billed to a non-brazilian account holder. If transportation charges are billed to a Brazilian account holder, charges are included in CIF. FedEx can pay duties & taxes ahead of time to assist with clearance. Those fees will either be billed to the recipient s FedEx account or collected upon delivery. Customs Clearance Facility All activities for Formal clearance are performed at the Brazil government warehouse. FedEx does not control shipments stored at this facility after docking them upon flight arrival. Customs clearance is performed by the customs broker (BSO) engaged by recipient: Recipient may engage their own broker FedEx LTDA, customs broker company in Brazil, can perform this activity once engaged by recipient. Additional cost is assessed to recipient. Clearance Window Customs and other government agencies clearance times vary from one to five business days. Selection Process Customs and other government agencies selection process is based on a random electronic system, after registering import declaration. Shipment inspection is indicated by color: Green cleared Orange only documents are inspected Red documents and freight are physically inspected 12

13 EXPRESS VS. FORMAL EXPRESS FORMAL Formal clearance regime Required paperwork Is BSO required? Preparing a BSO shipment Delay at storage Delivery Duty Paid What paperwork is required for BSO clearance? The following paperwork is required for Formal clearance with BSO: Customs Clearance Anvisa Agency Clearance MAPA Agency Clearance FedEx 023 air waybill FedEx ETN air waybill in International Air Transport Association (IATA) format Commercial Invoice Packing list FedEx 023 air waybill FedEx ETN air waybill in IATA format Commercial Invoice Packing list FedEx 023 air waybill FedEx ETN air waybill in IATA format Commercial Invoice Special form to be submitted by recipient Guia de Recolhimento da União (GRU) provided only by recipient Special form to be submitted by recipient 13

14 EXPRESS VS. FORMAL EXPRESS FORMAL Formal clearance regime Required paperwork Is BSO required? Preparing a BSO shipment Delay at storage Delivery Duty Paid How do I know if my shipment requires Broker Select Option? All shipments entering Brazil through the Formal clearance regime require the Broker Select Option (BSO). This includes any products intended for resale. They can be FedEx International Priority BSO, FedEx International Economy BSO, FedEx International Priority Freight BSO, or FedEx International Economy Freight BSO. Regardless of the type of transportation service used by the shipper/recipient, customs clearance will be performed by a customs broker engaged by the recipient and will be performed at a government warehouse upon arrival in Brazil. Can a U.S. shipper proactively engage FedEx LTDA to act as the customs broker, or must that request come from the recipient in Brazil? A customs broker is required only for Formal clearance shipments. For those shipments, the recipient must authorize FedEx LTDA to act as the customs broker. The shipper will want to make sure the recipient has designated FedEx as the broker with the recipient s RADAR registration. When using FedEx as a customs broker, the recipient is also responsible for all duties & taxes. These charges cannot be reverted to the shipper s FedEx Express account number. 14

15 EXPRESS VS. FORMAL EXPRESS FORMAL Formal clearance regime How do I prepare a BSO shipment for entry into Brazil? Required paperwork Is BSO required? Preparing a BSO shipment Delay at storage Delivery Duty Paid Packaging a BSO shipment for entry into Brazil To avoid having split/partial shipments on the way to Brazil: Load shipments with a large amount of pieces onto a skid/pallet. * Load small packages onto a skid/pallet and make it a single shrinkwrapped volume. * Issuing the air waybill The FedEx Extended Tracking Number (ETN) air waybill 12-digit number is used for BSO, as well as for any other FedEx Express service. Make sure the BSO field is properly marked, so the Visa Manifest Report will reflect it as well as an URSA Code label. FedEx Brazil will convert regular ETN air waybill 12-digit numbers into IATA format using the same information originally provided by the shipper prior to flight arrival in Brazil. Additional information required by Brazil Customs The only additional items of information required by Brazil Customs are the following: Chargeable weight, whenever applied Rate per kilo/pound, including fuel surcharge Total freight charge, including fuel surcharge Are partial/split shipments allowed into Brazil? Incomplete shipments are NOT allowed to be moved to Brazil. According to Brazil Customs regulations, split/ partial shipments CANNOT be cleared until the balance of the shipment arrives in Brazil. It is important for shippers to ensure that the total number of pieces listed for the shipment match the number of pieces being shipped and that they are all shipped on the same date. * Note that the quantity of pieces mentioned on the air waybill must be the total number of skids/pallets used, and not loose pieces. 15

16 EXPRESS VS. FORMAL EXPRESS FORMAL Formal clearance regime Required paperwork Is BSO required? Preparing a BSO shipment Delay at storage Delivery Duty Paid Are storage fees assessed if clearance takes a long time, if the customer s broker is delayed, or if payment of duties & taxes is not readily available? Formal clearance is performed at the airport administration warehouse; therefore, the recipient must pay a fee based on the following: 1.5% of Cost, Insurance and Freight (CIF) for the first five-day period. Additional time may possibly incur additional fees. 16

17 EXPRESS VS. FORMAL EXPRESS FORMAL Formal clearance regime Required paperwork Is BSO required? Preparing a BSO shipment If the shipper can arrange it, can FedEx support Delivery Duty Paid (DDP) shipments in Brazil with the Formal clearance process? DDP applies only to Express clearance. Delay at storage Delivery Duty Paid 17

18 RADAR WHAT S NEEDED CLASSIFICATION DUTIES & TAXES What is a RADAR license and how does it affect my shipments to Brazil? Brazilian companies engaged in foreign trade are required to register with the Federal Revenue of Brazil, which grants a license, known as RADAR. Brazil does not allow imports for unlicensed importers. With a RADAR license, an importer can access Brazil s SISCOMEX system. This is Brazil Customs facilitation system for managing and analyzing trade data. The system helps verify import/export information, spot problem shipments, and manage trade risks. Is RADAR import registration required only for registered businesses in Brazil, or is it also required of individuals who are importing into Brazil to fulfill online or catalog purchases? RADAR import registration is required for any recipient company or individual using Formal clearance. For information about RADAR and SISCOMEX, go to radariscomex.com.br. 18

19 RADAR WHAT S NEEDED CLASSIFICATION DUTIES & TAXES Import permits Anvisa MAPA How do I know if shipments require import permits? Based on the Harmonized System (HS) classification, there are several restrictions that importers must be made aware of, especially if import permits are required. U.S. exporters should provide full descriptions and properly classify goods on the Commercial Invoice to educate their Brazilian importers regarding possible importation requirements. Some commodities are regulated by government agencies, such as those related to healthcare (pharmaceuticals, cosmetics, medical devices), food, electronics, and machine & automotive parts. Understanding the requirements for the government agencies is critical; i.e., Anvisa (consumer health), MAPA (agriculture), etc. 19

20 RADAR WHAT S NEEDED CLASSIFICATION DUTIES & TAXES Import permits Anvisa MAPA What is Agência Nacional de Vigilância Sanitária (Anvisa)? Anvisa is the health regulatory body in Brazil and is similar to the Food and Drug Administration (FDA) in the U.S. Products for human consumption (medications, cosmetics, etc.) require additional licenses for export to Brazil. These licenses must be issued by Anvisa anvisa.gov.br. Special attention should be given when requesting permission for these products. Granting import licenses can take as long as six months. 20

21 RADAR WHAT S NEEDED CLASSIFICATION DUTIES & TAXES Import permits Anvisa MAPA What is the Ministry of Agriculture, Livestock and Food Supply (MAPA)? Agricultural products are divided into two categories chemical and biological. Registration for chemicals can be completed in 8 months. The registration of biological products takes 24 months. These licenses must be issued by Ministério da Agricultura agricultura.gov.br. For instructions provided by Brazil s Director of Department of Inspection of Animal Origin Products (DIPOA), go to: Note: The U.S. Department of Agriculture s Foreign Agricultural Service has offices in Brazil that can assist U.S. exporters of agricultural products. Please go to usdabrazil.org.br for more information about their programs. 21

22 RADAR WHAT S NEEDED CLASSIFICATION DUTIES & TAXES How does Brazil Customs classify import products? Brazil uses a system called MERCOSUR Common Nomenclature (NCM) to classify import duty and taxation on products imported into the country. You can see the structure of the NCM code in the illustration below Sub-item Item Sub-position Position Chapter (8th digit of MCN) (7th digit of MCN) (1st six-digit of HS) (1st four-digit of HS) (1st two-digit of HS) 22

23 RADAR WHAT S NEEDED CLASSIFICATION DUTIES & TAXES How are duties & taxes calculated and paid? Once goods arrive in Brazil and are cleared through customs, all duties & taxes must be paid to the Brazilian government before the goods can be removed from the airport or port for final delivery. HS code classification plays a vital role in the amount of duties & taxes calculated. For this reason, it is important that the U.S. export shipper properly identify and document HS codes on the Commercial Invoice. This will avoid duty and tax issues, which could impact the release from customs and ultimately the final delivery of goods. 23

24 IAWB COMMERCIAL INVOICE PACKING LIST CERTIFICATE OF ORIGIN EEI BEST PRACTICES What is a FedEx International Air Waybill (IAWB)? You must include on a FedEx International Air Waybill the following data: Sender (Name, address, phone number) Recipient (Name, address, phone number) end customer Customs Registration or Tax ID Number for Importer of Record (IOR) Commodity Description & HS Code Customs Value Sender Account Number for Transportation Charges Sender Account Number for Duties & Taxes Important: To ensure DDP (Delivery Duty Paid), the IAWB duty and tax section must indicate that the sender should be billed. If the sender box is not checked, then the recipient bears the responsibility for payment, and clearance delays should be expected until payment is received. 24

25 IAWB COMMERCIAL INVOICE PACKING LIST CERTIFICATE OF ORIGIN EEI BEST PRACTICES What is a Commercial Invoice? A Commercial Invoice is required for all non-document shipments. A specific format is not required, although the following basic information must be included: Shipper (Name, address, phone number) Consignee (Name, address, phone number) end customer Importer of Record (IOR) (Name, address, telephone number) Tax ID Number Place and Date of Shipment Detailed Description of Goods HS Code for Each Item Shipped Freight on Board (FOB) Value of Each Item Country of Origin and Destination Quantity and Weight Currency Used Freight and Insurance Charges (as applicable) Important: For samples, the declared value for Customs should be that of market value, deducting profit. An amount of $0 USD cannot be accepted and will cause clearance delays. SELLER/SHIPPER (Name, Full Address, Country) CONSIGNEE (Name, Full Address, Country) Port of Lading Final Destination Other Transportation Information Tax Identification Number (EIN) Exporting Carrier Commercial Invoice Invoice Date and Number Tracking ID/Air Waybill No. Buyer (if Other than Consignee) Customer Order Number Terms and Conditions of Delivery and Payment (incoterms) Currency of Sale Marks and Numbers Total Number of Packages Total Gross Weight (kg) Cubic Meters Complete And Accurate Commodity Description And Country of Manufacture These commodities, technology, or software were exported from the United States in accordance with the Export Administration Regulations. Diversion contrary to United States law is prohibited. I declare all the information contained in this invoice to be true and correct. Signature and Status of Authorized Person Date Page of Place Quantity/ Unit of Measure Unit Price Amount Packing Costs Freight Costs Other Transportation Costs Handling Insurance Costs Assists Additional Fees Duties and Taxes Total Invoice Value 25

26 IAWB COMMERCIAL INVOICE PACKING LIST CERTIFICATE OF ORIGIN EEI BEST PRACTICES What is a packing list? For all non-document shipments, Brazil requires a packing list detailing the shipment s contents. It is mandatory for multiple-piece shipments to include the shipment paperwork. The following information should be included: Place and Date of Shipment Purchase Order Number Description of Goods Quantity and Type of Packaging Weight Marks and Numbers on the Packages (if any) 26

27 IAWB COMMERCIAL INVOICE PACKING LIST CERTIFICATE OF ORIGIN EEI BEST PRACTICES What is a Certificate of Origin? The Certificate of Origin verifies the country in which the product was manufactured. The product being exported and its destination country determine if a Certificate of Origin is required. Is a Certificate of Origin required for ALL shipments to Brazil or only for certain commodities? A Certificate of Origin is required only for commodities subject to import licensing, permitting, or quota restrictions according to their classification. Other shipments should not require a Certificate of Origin. 27

28 IAWB COMMERCIAL INVOICE PACKING LIST CERTIFICATE OF ORIGIN EEI BEST PRACTICES What is Electronic Export Information (EEI) for a U.S.-specific shipper? When a U.S. export shipment includes any one commodity with a total value of more than $2,500 USD, the exporter must file an Electronic Export Information (EEI). FedEx can file the EEI on behalf of exporters. There are two options for filing an EEI through FedEx: FedEx Export AgentFile Contact FedEx International Customer Service at GoFedEx (and say international services ) to request the FedEx Export AgentFile form be faxed or ed to your location. Complete the form and fax it to (toll free) or it to [email protected]. Use FedEx Ship Manager at fedex.com. Note: For more information or for help completing the forms, call FedEx International Customer Service at GoFedEx (and say international services ) 28

29 IAWB COMMERCIAL INVOICE PACKING LIST CERTIFICATE OF ORIGIN EEI BEST PRACTICES What are some best practices for exporting to Brazil? To help make the export/import process go more smoothly, keep these tips in mind: Ensure consignee is pre-registered in the RADAR system and obtains importer number Include importer number on Commercial Invoice Provide valid HS code and full description of goods Indicate Broker Select Option - If declared value for Customs exceeds $3,000 USD - If goods being transported will be used for commercial purposes upon import - If alcohol is being transported 29

30 When a consignee does not have a RADAR license number, what is the process for return, or is there a temporary way to get a RADAR license number? Our brokerage group will contact the recipient and offer RADAR registration service before Brazil Customs does. This is the easiest way to process returns. If the recipient does not want to proceed with the RADAR registration process, we can file a Return to Sender request. This process takes longer, and requires authorization from Brazil Customs. 30