Product nationalization: understand its importance and how to do it

  • 14/02/2019
  • 10 minutes

In international commerce, agents that work with the import of goods have product nationalization as an indispensable step in the achievement of their goals. It consists on the transformation of an international product in a national one, that is, the importer acquires foreign merchandise for consumption, resale, or industrialization.

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Thus, it’s only when an allotment or unit is properly nationalized that it becomes possible to take it out of the place in which the customs authority keeps goods until their legalization.

If your company or your clients are planning on acting on the import field, they’ll need to know what to do to nationalize their products as soon as they get to Brazil. That’s what we’ll talk about now, with the help of Costa Porto’s executive general manager, Julien Fauquenoy. Check it out!

The first steps to product nationalization

As soon as goods arrive in Brazilian territory, they are stored in the so-called Customs Enclosure to be inspected. It’s only after the tax payments that the merchandise can be delivered to the importer, proprietor of the goods.

To some products, there are customs barriers that need to be analysed. These barriers can be impediments, while others are set for analysis of consenting organizations. Therefore, the customs authority fulfills the purpose of restricting imports so that the national industry can be protected.

These limitations, however, are tied to the product. If they are not observed and action is not taken correctly and in due time, before the import, the products will be lost once they arrive at their final destination. The Brazilian Federal Revenue Office will not allow the nationalization of the merchandise and all the investment will go down the drain. That’s why all offshore operations, both export and import, need to be managed and accompanied by expert professionals.

Today, according to the Federal Revenue Office’s website, customs clearance, as nationalization is also known as, can be concluded in three days time. It can seem like a short time, but it’s a deadline that can be quite long to those that need to quickly recover the investment they made. This reinforces the importance of counting on professionals when it’s time to carry out nationalization.

To summarize, if your company decides to import products, it will need to:

  • look for a specialist to provide orientation on the planned operation;
  • verify if your company fulfills all the requirements requested by the Federal Revenue Office from importers — if it doesn’t, you must speed up qualification;
  • guarantee that the product that you wish to import doesn’t have any barriers, such as prohibition or limitation of purchase;
  • apply customs rules and modals at the moment of clearance in respect to the previous analysis.

The payment of taxes in import operations

Even before carrying out all those steps, you’ll need to take care of other important procedures, which must make up the strategic planning of every company that deals with international commerce. One of the most sensible ones is the calculation of taxes to be paid, that represent a considerable slice of the import costs.

The taxation of foreign goods follows the determinations of the Directive 156/1999 of the Ministry of Finance. According to the law, every import is taxed at a single rate of 60% of the value of the merchandise, limited to R$ 3,000 per order.

It’s worth highlighting that this percentage is calculated on the total value of the product, including what has been paid for shipping, insurance, and other import charges. The government justifies the high rate as a protectionist measure, because its goal is to control the entrance of foreign goods in a way that does no harm to the national industry.

The documents required to nationalize merchandise

Although there may be variations in the necessary documentation, in general common documents are required, regardless of the kind of merchandise that’s entering Brazil. We can list the following papers:

  • commercial invoice, a responsibility of the exporter;
  • loading knowledge, for which the transporting company is in charge of and that makes it possible to prove the product has been shipped;
  • postal form in which the content ordered is declared;
  • proof of payment for the product to be nationalized.

Pay attention, because other documents might be required for the product nationalization to be completed. That’s why we’ll reinforce again the importance of counting on the support of specialists.

What the law says

Fortifying the protectionist character that the Brazilian government aims to establish when setting up rules for international commerce, it’s important to highlight some extracts from the Decree 6,759/09. For example, see what paragraph 3 on the third article says:

“The customs authority can require that the primary zone, or part of it, be protected by obstacles that prevent indiscriminate access of vehicles, persons, or animals.”

Following that, the fourth article is equally explicit when deliberating about the possible creation of surveillance zones in places where foreign merchandise might circulate. This surveillance, however, includes land and sea border areas.

Anyway, the law also foresees some protectionist mechanisms for the importer. That can be observed, for example, on article 71, which mentions that taxes will not be incident in case the merchandise is destroyed or damaged under customs control.

Reasons why you should outsource import processes

Wilson Sons can help on the process since it partners up with specialists, guiding their clients through all customs processes. In its extremely vast portfolio of services, there is assistance for companies that wish to work in the import field.

The advantage of outsourcing the service is that it can be done directly by the importer, transferring the whole operation to a specialized company. Therefore, it’s possible to reduce cost and optimize the final delivery time.

As you’ve seen in this article, there is no shortage of obstacles for companies that wish to profit by bringing in merchandise or inputs from outside of Brazil. That doesn’t mean that profit is impossible; however, it increases the demand for specialization, since a single misstep might lead to unrecoverable losses.

In this aspect, a company with vast expertise in the field is the best alternative to ensure operations free of sanctions or restrictions when it’s time to effect product nationalization. That’s why Wilson Sons represents the option that’s better suited to the requirements of the intricate, and at the same time fascinating, world of international commerce.

The subject, as you can notice, is extensive and usually arouses doubts. So leave a comment below, we’re certain you have something worthwhile to add!