Current laws on maritime export

Those who work with chartering and shipping know how relevant it is the knowledge on current laws related to maritime export. After all, in order to act according to the legislation, it’s necessary to know it thoroughly so you can obey all the norms.

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Considering the great importance of the subject to the people who deal frequently with the maritime export sector, we’ve prepared this article. By reading it, you’ll understand how the activity works in Brazil and to what regulations you should pay special attention. Enjoy!

What is the importance of maritime shipping in Brazil?

In order to analyze the matter with more depth, we’ve talked to Lisandro Vieira, CEO of WTM in Brazil. Even though there have been difficulties caused by the Brazilian political and economic scenarios in the last few years, activities might have been reduced, but they didn’t stop at any moment due to the importance they have in the context of our economy.

After all, according to Vieira, “maritime transport is the main mode of transport of our cargo, both import and export. Among importers and exporters, Brazil has more than 50 thousand companies, if we consider the economic groups. The large majority of these organizations transport their cargo via maritime modal, which is safer and cheaper than other modals, such as aerial”.

“Having maritime transport as a valve to drain what is produced and what is brought here in terms of inputs and raw materials is fundamental for the Brazilian companies that operate in international commerce. It’s indispensable, because it’s not possible to imagine operations in Brazil without a maritime transport increasingly better structured, with solid companies and trustworthy partners that care about the quality of the service provided to the cargo owners who move this modal”, complements the specialist.

How does maritime export work?

First of all, it’s important to remember that exporting to another country or buying something that comes from abroad is very different than selling to another state, for example. When a commercial relation happens between two countries, differences tend to be bigger in relation to certain aspects, such as:

• internationalization of the products;
• documentation and packaging;
• licensing;
• language and translation.

When discussing the subject, Lisandro says that the complexities involved in exporting cargo go beyond logistics, reaching also the customs dimension. “Depending on the cargo to be exported, it will be necessary to talk to various government agencies and authorities. Verifying and calibrating the cargo, for example, might be required. In short, international logistics — maritime logistics, especially — offer some obstacles to the exporters, such as the need for taking an empty container out of a terminal before loading it in the factory.”

“Any logistical error might represent a fairly heavy cost that wasn’t foreseen in the margin or when the exporter’s price was set. Therefore, international commerce logistics are very distinct from selling in the internal market, when a truck goes from one state to another. There are components such as the Tax on the Circulation of Goods and Services (ICMS) and the Federal Highway Police, but it’s not so complex as when delivering cargo in another country”, points out Vieira.

In this context, besides shipping agencies, there are also commerce or trading companies with a vast know-how about international logistics. They are alternatives recommended to those who don’t want to take on the onus or handle the bureaucracy inherent to the process. It’s evident that outsourcing doesn’t solve all problems, but it’s a good strategy because it allows each one of the parties involved to turn their attention to the main activity of their respective businesses.

Incoterms: learn more about them

According to the CEO of WTM, “Incoterms are international rules created to avoid misunderstandings between the buyers and the sellers in an export process. They determine when the responsibilities of one end and of the other begin, be it in relation to documentation, cost or risk.

They are constituted of 11 terms, which are divided into 4 main categories: E, F, C, and D. It’s worth noting this division is unofficial, that is, it was originally set in the determinations proposed by the standardization. By considering the categories, the obligations of each party become much clearer, thus helping to avoid the problems and challenges resulting from negotiations between distinct cultures. Three Incoterms are especially important for maritime transport. Keep reading and learn the particularities of each of them.

Free On Board (FOB)

Here, the exporter is not only responsible for transporting the cargo until the port, but he or she must also ship it on the vessel and take on the costs of port operations.

Cost and Freight (CFR)

In this modality, the exporter handles the transport and is responsible for hiring a ship and for paying the sea freight.

Cost, Insurance and Freight (CIF)

Similar to CFR, but here the exporter must also hire insurance against the risk of loss or damage to the cargo during the international maritime transport.

What are the main aspects of the law related to maritime export?

Many people have doubts about the tax burden, which is a very delicate aspect of international commerce. For Lisandro, “in Brazil, it’s important to highlight Law Number 9481/1997, which reduces to zero the income tax rate on shipments that go abroad by way of maritime transport. Originally, there was no exemption; however, in order to obey the legislation, the Federal Revenue Office (Receita Federal) reduces it to zero and doesn’t charge this tax, but it’s necessary to declare it. However, when the home country of the maritime transporter is a tax haven, the reduction ceases to exist and a taxation  of 25% is applied”.

“For a long time, there weren’t exchange regulations specific to this area, only generic prohibitions. One example: negotiating in foreign currency is prohibited to any company that isn’t a financial institution authorized to act on the exchange market by the Central Bank of Brazil. Recently, a National Agency for Waterway Transportation (ANTAQ) regulation was created, setting a fine that goes up to 100 thousand reais for transporters or agencies who charge differently from the prices set by the Central Bank. That caused quite a tumult, since it’s been a common practice for years”, concludes the specialist.

Anyway, those who act on the sector must pay attention to matters related to taxes, bureaucracy, and exchange. Some of the rules are not specific to international transport, but also apply to the segment.

In general terms, Brazil can be considered in dire need of a standardization of processes and interpretations by the authorities in relation to maritime export. Thankfully, there is already a project underway, the Foreign Trade Integrated System (Portal Único de Comércio Exterior), aiming to deburocratize and uniform procedures for exporters, transporters, and the government.

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