Answer ... Multilateral and regional trade agreements: The following multilateral and regional trade agreements apply in Brazil:

• The General Agreement on Tariffs and Trade (GATT) 1947 sets out rules aimed at reducing tariffs and other trade barriers and eliminating discriminatory treatment in international commerce. Brazil incorporated it through Law 313/1948. In 1994, the World Trade Organization incorporated GATT 1994 and Brazil has been a member since 1995 (Decree 1355/1994).
• Mercosur (the Southern Common Market) is an economic bloc resulting from the Asunción Treaty, regulated by Economic Supplementation Agreement 18/1991 (ACE 18). Brazil incorporated it through Decree 550/1992. Mercosur’s members are Brazil, Argentina, Paraguay, Uruguay and Venezuela (suspended since 1 December 2016). Its associated countries are Bolivia, Chile, Colombia, Ecuador, Guyana, Peru and Suriname.
• The Agreement on Trade Facilitation sets out rights and obligations aimed at:
• • modernising and harmonising customs procedures globally; and
  • promoting reductions in the costs and timeframes of foreign trade operations.
• Brazil incorporated it through Decree 9326/2018.

Bilateral and regional trade agreements: Brazil has entered into numerous trade agreements within the scope of the Latin American Integration Association (ALADI), which was established in 1980 with the aim of gradually and progressively establishing a Latin American common market – mainly through the adoption of tariff preferences and the elimination of non-tariff restrictions. Its members are Argentina, Bolivia, Brazil, Chile, Colombia, Cuba, Ecuador, Mexico, Paraguay, Panama, Peru, Uruguay and Venezuela.

The main trade agreements in effect in Brazil within the scope of ALADI are as follows:

• Brazil/Uruguay Economic Complementation Agreement (ECA) 2 regulates trade in automotive products between Brazil and Uruguay. Brazil incorporated it through Decree 88419/1983.
• ALADI Regional Tariff Preferences Agreement 4 (RTPA-4) establishes tariff preferences, with reductions in import tax according to the development level of the exporting country. Brazil incorporated it through Decree 90782/1984.
• The ALADI Regional Agreement on Cooperation and Exchange of Cultural, Educational and Scientific Goods (RA 7) aims to promote the free circulation of cultural, educational and scientific materials. Brazil incorporated it through Decree 97487/1989.
• Brazil/Argentina ECA 14 sets out the conditions for establishing a common market between Brazil and Argentina. Brazil incorporated it through Decree 60/1991. After the creation of Mercosur, it was overturned by ACE 18, except in relation to automotive products.
• Mercosur/Chile ECA 35 aims to establish a free trade zone and expand the economic space through economic, energy, scientific and technological cooperation. Brazil incorporated it through Decree 2075/1996.
• Mercosur/Bolivia ECA 36 aims to establish a free trade zone. Brazil incorporated it through Decree 2240/1997.
• Brazil/Mexico ECA 53 aims to establish a free trade zone. Brazil incorporated it through Decree 4383/2002.
• Mercosur/Mexico ECA 54 aims to establish a free trade zone. Brazil incorporated it through Decree 4598/2003.
• Mercosur/Mexico ECA 55 supports the trade of products in the automotive sector. Brazil incorporated it through Decree 4458/2002.
• The Brazil/Guyana/Saint Kitts and Nevis Partial ECA (PECA.A25TM-38) was initially signed by Brazil and Guyana in 2001; Brazil incorporated it through Decree 3989/2001. After Saint Kitts and Nevis joined in 2012, Brazil incorporated the new agreement through Decree 8200/2014.
• The Brazil/Suriname Partial ECA (PECA.A25TM-41) governs the rice trade. Brazil incorporated it through Decree 5565/2005.
• Mercosur/Peru ECA 58 aims to establish a free trade zone. Brazil incorporated it through Decree 5651/2005.
• Mercosur/Andean Community ECA 59 aims to establish a free trade zone with the countries of the Andean Community (Colombia, Ecuador and Venezuela). Brazil incorporated it through Decree 5361/2005.
• Mercosur/Cuba ECA 62 aims to establish a free trade zone. Brazil incorporated it through Decree 6068/2007.
• Mercosur/Venezuela ECA 69 aims to establish a free trade zone. Brazil incorporated it through Decree 8324/2014.
• Mercosur/Colombia ECA 72 aims to establish a free trade zone. Brazil incorporated it through Decree 9230/2017.
• Brazil/Paraguay ECA 74 aims to establish a free trade zone. Brazil incorporated it through Decree 10448/2020.

Outside ALADI, the leading trade agreements executed by Brazil under Mercosur are as follows:

• The Mercosur/India Preferential Trade Agreement comprises 450 tariff lines offered by India and 452 items offered by Mercosur, with preference margins of 10%, 20% or 100%. Brazil incorporated it through Decree 6864/2009.
• The Mercosur/Israel Free Trade Agreement comprises 8,000 tariff lines offered by Israel and 9,424 items offered by Mercosur, with tariff elimination schedules of eight and 10 years, respectively. Brazil incorporated it through Decree 7159/2010.
• The Mercosur/Southern African Customs Union (SACU) Preferential Trade Agreement encompasses 1,026 tariff lines offered by SACU (South Africa, Namibia, Botswana, Lesotho and Swaziland), and 1,076 items by Mercosur, with preference margins of 10%, 25%, 50% and 100%. Brazil incorporated it through Decree 8703/2016.
• The Mercosur/Egypt Free Trade Agreement aims to open up the bilateral market for goods, covering approximately 9,800 tariff lines, and contains an evolutionary clause on the possibility of future understandings for access to services and investments. Brazil incorporated it through Decree 9229/2017.
• The Mercosur/European Union Bi-regional Association Agreement eliminates import taxes for more than 90% of the goods traded between the countries of the two blocs after a transition period of up to 15 years. In addition, the agreement foresees:
• • greater openness, transparency and legal security in the services, investment and government procurement markets;
  • the reduction of non-tariff barriers;
  • the consolidation of a schedule of good regulatory practices; and
  • the establishment of modern regimes in trade facilitation and intellectual property, among others.
• The parties reached agreement on the trade pillar in June 2019 and concluded negotiations on the political and cooperation bases in June 2020. The agreement’s text is currently undergoing the legal scrubbing process. Once this stage has concluded, the text will be ready for formal signature and, subsequently, for the internal parliamentary approval procedures. Due to its economic importance, this is the broadest and most complex agreement ever negotiated by Mercosur.
• In August 2019, negotiations concluded on a free trade agreement between Mercosur and the European Free Trade Association – a bloc made up of Switzerland, Norway, Iceland and Liechtenstein. It aims mainly to trade facilitation and customs. The text of the agreement is currently undergoing the legal scrubbing process.

Brazil is negotiating trade agreements under Mercosur with Canada, South Korea, Indonesia, Lebanon and Vietnam; and has concluded negotiations with Palestine and Singapore.

Bilateral agreements: Brazil recently executed the Protocol for the Trade and Economic Cooperation Agreement with the United States, which aims to facilitate trade and customs administration, good regulatory practices and anti-corruption. Brazil incorporated it through Decree 11092/2022.

In addition, Brazil has signed agreements on cooperation and facilitation of investments (ACFIs) with Angola and Mexico. Negotiations for ACFIs with Colombia, the United Arab Emirates, Ecuador, Ethiopia, Guyana, India, Malawi, Morocco, Mozambique and Suriname have concluded.

Answer ... The president of Brazil has exclusive authority to enter into international treaties, conventions and acts, subject to a referendum of the National Congress (Federal Constitution, Article 84). The president negotiates trade agreements with the support of the Ministry of Foreign Affairs and the Special Secretariat for Foreign Trade and International Affairs of the Ministry of Economics.

After the conclusion of the negotiations and approval of the final text of the agreement, the process of giving effect to international agreements may take up to three years. It involves the following phases:

• signing of the agreement;
• approval of the agreement by the National Congress, through a legislative decree;
• ratification of the agreement by the head of state, usually through the exchange of notes and notifications; and
• enactment of the agreement, though a presidential decree.

Answer ... In Brazil, the effectiveness of international trade agreements depends on the fulfilment of all requirements, from negotiation to ratification and promulgation of the text. The legal system provides no exceptions for the application of interim provisions while new trade agreements are under negotiation.

Answer ... The primary customs regulation in Brazil is the Customs Letter, approved by Decree 6759/2009, which consolidates the wording of several federal laws and decrees to regulate the administration of customs activities and the inspection, control and taxation of foreign trade operations.

The main laws consolidated in the Customs Rule are:

• Decree-Law 37/1966;
• the Tax Code (Law 5172/1966); and
• Law 10833/2003.

Other essential customs rules and regulations include:

• Normative Instruction RFB 680/2006;
• Ordinance SECEX 23/2011; and
• Resolution GECEX 272/2021.

Answer ... The Brazilian Internal Revenue Service (IRS) is responsible for enacting the rules and regulations that govern customs clearance procedures. It has broad powers to control foreign trade operations, including by:

• reviewing all related documents and registers;
• conducting physical inspections and seizures of cargo and luggage;
• charging import and export taxes; and
• imposing duties and penalties.

Answer ... The Brazilian IRS has adopted the Foreign Trade Integrated System (SISCOMEX), which integrates the registration, monitoring and control of foreign trade operations. The rules that govern the operation of this system are set out in Normative Instruction RFB 1984/2020. Under SISCOMEX, the Brazilian IRS has broad powers over foreign trade operations and its approach in enforcing the customs rules is vigorous.

Following customs clearance, the Brazilian IRS still has five years to proceed with a customs review to verify:

• the regularity of payment of the applicable taxes and charges;
• the application of tax and customs benefits; and
• the accuracy of the information provided by the importer.

Answer ... All products imported into Brazil must be classified under the Mercosur Common Nomenclature (NCM), which reflects the structure of codes and descriptions of the Harmonized System established by the World Customs Organization.

According to the NCM, each product is subject to a specific import tax rate as expressed in Mercosur’s Common External Tariff. The rates vary from 0% to 60% and are levied on the customs value. Other taxes may also apply, such as:

• federal excise tax;
• federal contributions to the Programme of Social Integration and for the financing of social security; and
• state tax on commerce of goods.

Answer ... Importers of certain capital and IT and telecommunications goods, as well as their parts, pieces and components, which are not manufactured in Brazil and which have no equivalent national production may request a temporary and exceptional reduction in import tax through the ex-tariff mechanism. Import tax rates spelled with the letters ‘BK’ designate goods classified by Mercosur as ‘capital goods’; while those with the letters ‘BIT’ designate goods classified as ‘information technology and telecommunications goods’.

The importer must direct its request for the application of the ex-tariff mechanism to the Secretariat for the Development of Industry, Trade, Services and Innovation of the Ministry of Economy, which will proceed with a preliminary and technical analysis. It is up to the executive management committee of the Foreign Trade Chamber (CAMEX) to establish the import tax rates and decide on such requests.

Brazil also has special customs regimes which allow for import tax exemptions and suspensions or charges at a zero rate. One example is Repetro, a special tax and customs regime that grants a suspension of federal import taxes for equipment destined for the exploration and exploitation of oil and natural gas.

Answer ... CAMEX can apply provisional or definitive safeguard measures, such as an increase in import tax, through an addition to the Common External Tariff, in the form of an ad valorem rate, a specific rate or a combination of both.

Answer ... The Brazilian IRS manages the controls and restrictions for importing goods through the SISCOMEX Portal.

The importer and its representatives must first qualify to operate within the SISCOMEX Portal (Normative Instruction RFB 1984/2020). As a rule, imports are exempt from licensing and importers should only register the import declaration in SISCOMEX to initiate customs clearance procedures.

However, in the case of some products – such as used goods, medical products, cigars, alcoholic beverages, toys and products controlled by the army – imports may be subject to prior licensing requirements. Import licences can be granted automatically or otherwise by the consenting agencies, which will verify compliance with the relevant legal or regulatory formalities (SECEX Ordinance 23/2011). Examples of consenting agencies include:

• the Department of Foreign Trade Operations;
• the National Health Surveillance Agency;
• the Ministry of Agriculture;
• the National Film Agency;
• the National Oil Agency;
• the Brazilian Institute of Environment and Renewable Natural Resources; and
• the National Institute of Metrology, Quality and Technology.

After registration of the import declaration, SISCOMEX will designate the cargo to one of the customs conference channels (green, yellow, red or grey). Depending on the conference channel, the cargo can be:

• immediately released (green);
• subject to documentary inspection (yellow);
• subject to documentary and physical inspection (red); or
• seized for a thorough review by the customs authorities if there are signs of fraud (grey).

Thereafter, the Brazilian IRS will release the cargo and conclude the customs clearance.

Irregularities in import operations may subject the importer to penalties, such as fines and cargo seizures. For example, the wrong classification of an imported product attracts a fine of 1% of its customs value. Also, registration of an import declaration without a licence when the operation is subject to licence attracts a fine of 30% of the goods’ customs value. Penalties also apply if:

• the importer only obtains a licence after shipment of the goods; or
• the shipment occurs after the licence expiry date.

Brazilian IRS customs inspectors may apply the penalties in the customs conference and clearance or in customs revision proceedings.

Brazilian law also prohibits the import of certain goods, including:

• firearms;
• narcotics and other drugs;
• counterfeit or pirated items; and
• products deemed offensive to public morals, good customs, health or public order, such as electronic machines programmed to exploit gambling.

Answer ... Customs-related decisions in import or export proceedings must be duly grounded and rendered through a fiscal process. If the customs authorities detect an infraction, the offender has the right to:

• present a defence, either personally or represented by a lawyer, with factual and legal arguments to support the alleged rights;
• submit relevant documents; and
• request an expert report.

In case of a forfeiture penalty involving the apprehension of goods or vehicles, the customs authorities will decide the administrative proceedings at a single instance. As a rule, such proceedings take about one year.

As regards other infractions, the offender can present an administrative defence and start fiscal proceedings following the same process as federal tax infractions, with a judgment issued by:

• the Trial Chambers of the Brazilian IRS (DRJ) at first instance;
• the Administrative Council of Fiscal Appeals (CARF) at second instance; and
• the Superior Chamber of Tax Appeals (CSRF) at third and final administrative instance.

The DRJ is composed of customs and tax inspectors other than those who conducted the inspection. CARF and the CSRF are composed of representatives of taxpayers and representatives of the Brazilian IRS in the same proportion. The taxpayers’ representatives are appointed by confederations representing different economic sectors; while the Brazilian IRS selects its representatives from among senior tax inspectors. At CARF, the Third Section’s judgment panels have competence to hear customs-related cases. Special appeals to the CSRF are admitted only if the second-instance decision is not unanimous or diverges from precedent.

Lawyers can represent their clients and present written and oral administrative defences. If the case involves trial at all three instances, it usually takes more than five years.

The importer can still challenge a final unfavourable administrative decision by filing suit before the judicial courts.

Answer ... The Brazilian customs authorities can impose the following penalties for breach of the customs rules:

• forfeiture of vehicles;
• forfeiture of goods;
• forfeiture of currency;
• fines; and
• administrative sanctions, such as:
• • warnings; and
  • suspension, cancellation or revocation of a registration, licence, authorisation, accreditation or qualification for use of the customs regime or simplified procedures, activities relating to customs clearance or the movement and storage of goods under customs control, and related services.

Depending on the infraction, the Brazilian IRS will determine the applicable penalties, within the legal limits. The Brazilian IRS can impose penalties separately or cumulatively; and their imposition and enforcement do not affect the collection of taxes due or prejudice the application of penalties imposed for the same reasons under criminal or special legislation, unless otherwise provided by law.

Answer ... Brazilian law also imposes controls and restrictions on the export of goods.

Exporters and their representatives must first qualify to operate through the Foreign Trade Integrated System (SISCOMEX) Portal, where documents and declarations for export are registered.

Based on government policy to encourage exports and thus increase external sales, the imposition of charges on exports must be an exceptional measure. Therefore, most Brazilian exports either are exempt from export tax or benefit from tax and financial incentives.

Exports charges, where applicable, aim mainly to prevent certain goods from legally leaving the country with export benefits and then returning clandestinely (smuggling) – that is:

• tobacco products when destined for South and Central American countries (150%);
• weapons and ammunition when destined for South American countries (150%);
• leather products and hides of equine or bovine animals (9%);
• cashew nuts in the shell (30%); and
• sugar, milk and cream concentrate (100%).

Exports are also subject to customs risk analysis and selection for customs conference channels. Depending on the selected customs clearance channel (green, orange or red), the goods are:

• automatically cleared (green);
• cleared after documentary analysis (orange); or
• cleared after documentary analysis and physical inspection (red).

The main parameters for the risk analysis are:

• the exporter’s history of compliance with the tax and customs legislation;
• the nature, volume and value of the exports;
• the country of acquisition and destination of the exported goods; and
• the applicable tax treatment.

Answer ... The Brazilian Internal Revenue Service (IRS) is responsible for enforcing the export controls.

In addition to enacting rules and regulations to regulate customs clearance procedures for exports, the Brazilian IRS has broad powers to control foreign trade operations, including:

• reviewing all related documents and registers;
• conducting physical inspections and seizures of cargo and luggage;
• charging export taxes where applicable; and
• imposing duties and penalties.

Answer ... The Brazilian IRS enforces the export controls through the Foreign Trade Integrated System (SISCOMEX), the system which integrates the registration, monitoring and control of foreign trade operations. With the information registered in SISCOMEX, the Brazilian IRS has broad powers over foreign trade operations and its approach to enforcing the customs rules is relatively vigorous.

Following the review conducted during customs clearance, the Brazilian IRS still has five years to proceed with a customs review to verify:

• the regularity of the payment of taxes and other charges, where applicable;
• the application of tax and customs benefits; and
• the accuracy of the information provided by the exporter in the declarations for export.

Answer ... All customs-related decisions, in both import and export proceedings, must be duly grounded and rendered through a fiscal process. If the customs authorities detect an infraction, the offender has the right to present a defence and initiate administrative proceedings, either directly or represented by a lawyer.

In case of infractions to which a forfeiture penalty applies, involving the apprehension of goods or vehicles, the offender can challenge the notice of infringement, presenting a defence to the higher authority, which will decide at a single instance. As a rule, this process takes about one year.

As regards other infractions, the offender can challenge the relevant notice of infringement by presenting its administrative defence and commencing fiscal proceedings. The proceedings will follow the same process as federal tax proceedings, with a judgment issued by:

• the Trial Chambers of the Brazilian IRS at first instance;
• the Administrative Council of Fiscal Appeals at second instance; and
• the Superior Chamber of Tax Appeals at third and final administrative instance.

Administrative proceedings usually take more than five years.

An exporter can still challenge a final unfavourable administrative decision confirming the penalty imposed by the Brazilian IRS by filing suit before the judicial courts.

Answer ... The Brazilian customs authorities can impose the following penalties for breach of export controls:

• forfeiture of vehicles;
• forfeiture of goods;
• forfeiture of currency;
• fines; and
• administrative sanctions, such as:
• • warnings; and
  • the suspension and cancellation or revocation of a registration, licence, authorisation, accreditation or qualification for use of the customs regime or simplified procedures, activities relating to customs clearance or the movement and storage of goods under customs control, and related services.

Depending on the specific breach identified, the Brazilian IRS will determine the penalty or penalties applicable to the violator or those that are answerable for the infraction, within the legal limits. The Brazilian IRS can impose penalties separately or cumulatively; and their imposition and enforcement do not impede the collection of taxes eventually due or prejudice the application of penalties imposed for the same reasons under criminal or special legislation, unless otherwise provided by law.

Answer ... Brazil has joined the World Trade Organization (WTO) and has adopted anti-dumping measures, countervailing measures and safeguards agreements as follows:

• General rules on trade remedies:
• • Decree 1355/1994, which incorporated the anti-dumping, subsidies and countervailing and safeguards agreements into Brazilian law; and
  • SECEX Ordinance 162/2022, which provides for general rules adopted in trade remedies procedures.
• Anti-dumping measures:
• • Legislative Decree 30/1994: General Agreement;
  • Law 12546/2011, which governs the relationship between trade defence investigations and non-preferential rules of origin;
  • Decree 8058/2013, which regulates the administrative procedures relating to the investigation and application of anti-dumping measures; and
  • SECEX Ordinance 171/2022, which consolidates the rules applicable to anti-dumping procedures.
• Subsidies and countervailing measures:
• • Legislative Decree 30/1994: General Agreement;
  • Decree 10839/2021, which regulates the administrative procedures relating to the investigation of the existence of subsidies and the application of countervailing measures; and
  • SECEX Ordinance 172/2022, which consolidates the rules on the investigation, review and other procedures relating to subsidies and countervailing measures.
• Safeguards legislation:
• • Decree 1488/1995, which sets out the administrative procedures relating to the application of safeguard measures;
  • Decree 2667/1998, which implements the Nineteenth Additional Protocol to Economic Complementation Agreement 18 of Mercosur; and
  • SECEX Ordinance 169/2022, which consolidates the rules on the administrative procedures relating to the application of safeguard measures

Answer ... The Foreign Trade Chamber (CAMEX) is responsible for enforcing the trade remedy regulations under recommendations from the Undersecretariat of Commercial Defence and Public Interest (SDCOM) of the Foreign Trade Secretariat of the Special Secretariat for Foreign Trade and International Affairs, linked to the Ministry of Economics.

CAMEX can:

• apply or extend provisional or definitive trade remedies;
• approve or extend commitments; and
• order the retroactive collection or the extension of duties and penalties.

Answer ... Between January and December 2021, about 80% of all trade remedy investigations terminated with the application of the trade remedy. Historically, Brazil is the fifth-largest enforcer of anti-dumping measures and the 10th-largest target of anti-dumping measures. As of December 2021, Brazil ranked fourth worldwide for the number of anti-dumping measures in effect and 12th for the number of measures imposed against it by other countries.

Answer ... A trade remedy action starts with submission to SDCOM of an electronic request for investigation or petition by an interested party representing the domestic industry affected. The presentation of a pre-application of a consultative and non-binding nature is optional.

The proceedings may involve:

• domestic producers;
• local importers;
• foreign producers or exporters;
• official representatives from the export country government; and
• other interested parties.

The procedure may vary in the case of investigations involving fragmented industries – that is, those involving many domestic producers.

In exceptional circumstances, which are duly justified, SDCOM may initiate investigations ex officio if it has sufficient evidence of dumping, damage and a causal link between them. SDCOM can also review ex officio and recommend the immediate resumption of a suspended duty or remedy.

Answer ... Actions typically involve presenting duly grounded written petitions – accompanied by evidence, justification, sources and methodology – to prove the existence of damage to the domestic industry. SDCOM can conduct its investigation through electronic proceedings or with on-site verifications. The action may take two to three years.

Answer ... Interested parties can present their defences and submit evidence that they consider pertinent to the investigation in writing. SDCOM can permit or determine that hearings be held to allow a contradictory and substantive defence to be exercised, provided that all information presented orally is also reproduced in writing.

Answer ... Interested parties can challenge decisions ordering the application of trade remedies by submitting a request for reconsideration to the executive secretariat of CAMEX, accompanied by the factual and legal reasons for the challenge, within a non-extendable term of 10 days. Requests for reconsideration do not have suspensive effect. However, in case of reconsideration of the decision, the interested party has the right to restitution of amounts unduly charged.

Answer ... The Foreign Trade Intelligence Group (GI-CEX) works to identify signs of violations of the foreign trade legislation and counts among its members representatives of the Special Secretariat for Foreign Trade and International Affairs and the Brazilian Internal Revenue Service. Anyone can submit an electronic complaint regarding a violation of foreign trade legislation to GI-CEX. The penalties involve paying an amount in cash that is proportionate to the damage caused.

Answer ... There are different examples of trade barriers in Brazil, which are imposed by law, regulation, policy, measure or government practice. Some of these are tariff barriers, such as import tariffs and duties. Others are technical barriers, which are used for protectionist purposes; and non-tariff barriers, which deal with:

• quantitative restrictions;
• import licensing;
• customs procedures;
• customs valuations that are arbitrary or involve fictitious values;
• anti-dumping measures;
• countervailing measures;
• subsidies;
• safeguard measures; and
• sanitary and phytosanitary measures.

Brazil has adopted the World Trade Organization’s Agreement on Trade Technical Barriers and Agreement on Sanitary and Phytosanitary Measures.

Answer ... The Brazilian Internal Revenue Service (IRS) is responsible for enforcing tariff barriers; while non-tariff barriers may be enforced by different authorities, depending on their nature. The Foreign Trade Chamber (CAMEX) is responsible for enforcing non-tariff barriers under the recommendations of the Undersecretariat of Commercial Defence and Public Interest of the Foreign Trade Secretariat of the Special Secretariat for Foreign Trade and International Affairs, linked to the Ministry of Economics.

Answer ... The Brazilian IRS has broad powers over foreign trade operations and its approach in enforcing tariff barriers is vigorous. Non-tariff barriers are also vigorously enforced, especially in relation to import licensing and quantitative restrictions.

Answer ... Tariff barriers are imposed by the Brazilian IRS through the custom clearance procedure or during the customs revision period, and the administrative challenge follows the procedure described in question 2.7. Non-tariff barriers can be imposed by the Brazilian IRS, CAMEX or other governmental agencies, depending on their nature.

Answer ... The action varies depending on whether it concerns tariff or non-tariff barriers. If challenged, the action can take between one and five years.

Answer ... The Brazilian authorities often intervene to protect Brazilian exporters from trade barriers imposed by foreign countries, including new environmental, social and governance requirements. These measures may generate high adaptation costs for producers, to the point of excluding them from certain markets.

The Brazilian federal government has adopted the Electronic System for Monitoring Barriers to Exports, which is fed by the private sector, through which it controls trade barriers and intervenes in specific sectors as necessary.

Answer ... Brazil imposes non-tariff barriers such as:

• quantitative restrictions;
• import licensing;
• customs procedures;
• customs valuation that are arbitrary or involve fictitious values;
• anti-dumping measures;
• countervailing measures;
• subsidies;
• safeguard measures; and
• sanitary and phytosanitary measures.

These include technical barriers, which are used for protectionist purposes.

Answer ... The federal government imposes rules and sanctions in relation to foreign trade. Some sanctions are directly linked to customs procedures, as detailed in the Customs Letter and related legislation. Please see question 2.1 in this regard. Other sanctions aimed at enforcing non-tariff barriers can be found in disparate laws, whose application should be analysed on a case-by-case basis.

Answer ... The Brazilian Internal Revenue Service (IRS) is responsible for enforcing tariff barriers and customs sanctions, with the power to issue infringement notices and collect taxes and penalties. Penalties for violation of non-tariff barriers can be enforced by different authorities, such as the Foreign Trade Chamber, depending on their nature.

Answer ... The Brazilian IRS has broad powers over foreign trade operations and its approach in enforcing sanctions is vigorous. Sanctions related to non-tariff barriers are also vigorously enforced, especially in relation to import licensing and quantitative restrictions.

Answer ... Recently, Law 14353/2022 authorised the Brazilian government to impose unilateral retaliation measures in case of non-compliance with multilateral obligations by a member of the World Trade Organization (WTO). Brazil is among the top six users of the WTO Dispute Settlement System and is currently a claimant in five disputes, including with India, Indonesia and Canada.

Answer ... According to the relevant laws, individuals and companies acting in foreign trade operations are subject to sanctions.

Answer ... Please see questions 2.8 and 4.6.

Answer ... The Brazilian laws on foreign trade operations are extensive and complex; and foreign traders – whether individuals or companies, importers or exporters – can sometimes misunderstand their application. Consolidating laws and publishing technical guidance manuals may be helpful in this regard.

If an infraction is detected, the application of a sanction is inevitable. The competent bodies should consider certain strategies to ensure compliance with a sanction decision, such as:

• the setting of a deadline for amicable enforcement, with a waiver of penalties;
• a transaction with the authorities, within the limits of the law, with special conditions for payment or fulfilment of the decision; or
• the use of arbitration, with the participation of technical experts.

The penalties usually imposed for non-compliance with a sanction decision include:

• fines and duties;
• forfeiture and seizure of cargo and vehicles;
• blockage of amounts deposited in bank or investment accounts;
• blockage of the importer or exporter from operating in the foreign trade system; and
• blockage of operations with a specific country or territory.

Answer ... Brazil has become less prominent on the international trade scene in recent years, which should raise a red flag for the Brazilian government in relation to the trade barriers that the country has imposed.

According to the International Trade Barrier Index 2021, Brazil is ranked 83rd out of 90 countries when it comes to the imposition of trade barriers, having lost some ground in recent years. Brazil is also ranked 15th and last of all Latin American countries.

These negative results are directly linked to the government’s protectionist policies and were exacerbated in 2021 because of non-tariff barriers relating to COVID-19. While efforts were made to facilitate the import of urgently needed supplies to tackle the pandemic, the country also introduced new trade restrictions to prevent domestic production from being exported.

The war between Russia and Ukraine has affected international trade worldwide. In addition, Brazil recently suffered a loss when the European Parliament imposed trade sanctions against it due to increased deforestation in the Amazon, including restrictions on agricultural products grown in deforested areas. In doing so, the European Union sought to send a message to the Brazilian government; this is a crucial issue to be considered by the candidate who wins the 2022 presidential elections, due to its potentially severe impact on Brazilian foreign trade operations.

Answer ... Countries should establish intelligence groups to monitor the evolving regulatory framework for international trade. Brazil’s position on the international trade scene has weakened in recent years, but the following years could be crucial in reversing this situation – especially if the candidate who wins the 2022 presidential elections implements proper measures in this regard.

On average, Brazilian exports are subject to higher import tariffs than those applied to exports from countries with similar geographical or economic characteristics – especially markets that are as yet not well developed or commonly accessed. This situation reinforces the need for Brazil to step up the negotiation of bilateral and multilateral trade agreements with the aim of reducing such barriers and facilitating compliance with the regulatory framework for international trade.