In June 2016, the Federal Court of Accounts (TCU) ruled in the sense that the National Agency for Waterway Transportation (ANTAQ) was failing to inspect and regulate foreign shipowners operating in the long distance shipping in Brazil.

According to ANTAQ′s understanding, the Waterway Transportation Law determines that the long distance shipping is open to shipping companies from all countries and does not require authorization, provided that the treaties entered into by the Federal Government and the reciprocity principle are observed.

However, the Federal Court of Accounts considered ANTAQ′s omission to regulate this type of transportation was evidenced by (i) the lack of authorizations granted to foreign shipowners; (ii) the lack of rules to regulate the transportation and/or to punish abusive conducts; and (iii) the lack of knowledge, data and information regarding the shipping market, which prevents ANTAQ from avoiding collusion and abuses in the collection of shipping freights, terminal handling charges (THCs) and extra shipping freights from the Brazilian users.

As a result of the abovementioned irregularities, the Federal Court of Accounts determined ANTAQ to establish, within 90 (ninety) days, a procedure to ensure that the foreign shipping companies providing services in the Brazilian ports are in compliance with the treaties entered into by the Federal Government and with the reciprocity principle, by means of granting an authorization to such companies or through any other administrative act for such purpose, and by giving large publicity in respect to the countries that comply with constitutional and legal conditions.

The Federal Court of Accounts also determined that ANTAQ submits, within the same period, an action plan for regulation, ordination and inspection of long distance shipping in the Brazilian ports, allowing the control over this activity, considering, among other issues: the registration of foreign shipowners, the registration of shipping freights, extra shipping freights and other services; comparative studies of routes and prices of the foreign shipowners; and rules for the imposition of penalty to the foreign shipowners in case of unjustified omissions of ports.

ANTAQ appealed from the decision arguing that the Agency has been endeavoring efforts to improve the regulation and that there is a 2015 regulation proposal currently under discussion, which provides for the rules for long distance shipping by foreign shipowners, without the need of granting an authorization for such purpose. The Agency also stated that is settling parameters to ensure that the services are being rendered in a proper way. The appeal is pending on decision.

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