BRAZIL CLEARANCE

Disclaimer

Every effort has been made to ensure the accuracy of this presentation at the time of the publication, but the comments herein are necessarily of a general nature, are for information purpose only, are subject to change as regulatory requirements change, and do not constitute legal advice in any matter whatsoever.

You are urged to seek specific advice on matters of concern and not rely solely on this presentation.

Agenda for Today’s Webinar

FedEx Overview

Gateway to Brazil

SOUTH AMERICA LINEHAUL

Memphis

Sao Paulo

BRAZIL

Buenos AiresSantiago

•  Located 14 km (8 miles) from downtown Campinas and 90 km (58 miles) from the city of São Paulo, VCP is one of the main connection points in Latin America

•  The air cargo import/export terminal covers more than 81 thousand square meters

•  Air cargo is the airport’s leading activity

•  It connects to three major highways: Santos Dumont, Bandeirantes, and Anhanguera

FedEx flies directly to Viracopos-Campinas International Airport (IATA: VCP, ICAO: SBKP).

FedEx in Brazil

•  Five flights weekly to and from Brazil (Memphis-VCP)

•  Customs Clearance and Warehousing Services on-site at VCP

•  Direct access to nationwide domestic services within Brazil

FedEx has the largest combined air/ground transportation infrastructure in Brazil of any private sector company.

FedEx in Brazil

FEDEX DOMESTIC GROUND NETWORK

45 Branches

145 Distribution Points

770 Vehicles and Trailers

9,000 Team Members

FedEx® International Service Transit Time US to BR*

Transit Time BR to US*

FedEx International First® (early AM) 2 business days 2 business days

FedEx International Priority® 2 business days 2 business days

FedEx International Priority® Freight 3 business days 2-3 business days

FedEx International Economy® 4-5 business days 4-5 business days

FedEx International Economy® Freight 5 business days 5 business days

*Transit times may vary depending on BR postal codes

FedEx Facts

FedEx Facts

US export billing options require a valid FedEx account number.

TRANSPORTATION CHARGES

•  Cash

•  Check

•  Credit Card

•  Bill Shipper

•  Bill Consignee

•  Bill Third Party

DUTIES & TAXES

•  Bill Shipper

•  Bill Consignee

•  Bill Third Party

FedEx Facts In addition to standard FedEx prohibited items, the following items are prohibited to BR: •  Antiques •  Cash •  Cancelled checks •  Money orders •  Poisons (over 20 gr.) •  Non-prescription drugs •  Precious stones •  Soil •  Plants •  Fine artwork •  Collectible stamps •  Tobacco •  Porcelains •  Powder Note: Log and timber products from Liberia are also prohibited.

Brazil Clearance Overview

Brazil Customs Clearance Regimes Brazil has two customs clearance regimes for its imports: Express (informal) and Formal entry. 

EXPRESS CLEARANCE VERSUS FORMAL ENTRY CLEARANCE (BSO)

Item Express (Informal) Formal Entry Product – Description Documents, samples, books, materials not for resale (exceptions

may apply, like unaccompanied articles, among others) Any product

Customs Clearance Broker not required – cleared by FedEx Broker required – fees apply

Product for Resale No Yes

Declared Value for Customs limit

Maximum US $3,000 (if transportation charges are paid by the consignee or 3rd party in Brazil, the freight charges have to be summed up to the declared value).

No limits on value or weight

Duties & Taxes 60% Import Tax; 18% VAT Tax* *( the % and calculation method vary depending on the destination State) Admin taxes; storage fees

Import tax based on product classified under Harmonized system plus 18% VAT tax*

Clearance Facility FedEx warehouse Government warehouse

Clearance performed by FedEx team members Recipient’s customs broker (BSO)

Clearance Time •  Customs •  ANVISA •  MAPA-Agriculture

•  98% at 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

Clearance Regimes in Action The clearance process varies depending on the type of clearance your shipment requires.

Caged GIG GRU

VCP-SAOA VCP-VCPA VCP-NNP – VCP-RIO

Cleared VCPConvert to Formal

Clearance

Private WHS

Inspection Inspection

FedEx Facility Express Clearance

DVC < $ 3K

Gov Facility Formal Clearance

DVC - any $

Step 1: Brazilian Customs Registration SOUTH AMERICA LINEHAUL

•  A RADAR license grants access to Brazil’s SISCOMEX system, which manages trade data.

•  Brazil does not allow formal imports if the importer is not registered with this RADAR license. *Registration not required for express clearance

•  SISCOMEX is the Brazil Customs facilitation system for managing and analyzing trade data. It helps to verify import/export information, spot problem shipments and manage trade risks

Brazilian companies engaged in foreign trade are required to register with the Brazilian Federal Revenue agency, which grants a license, known as RADAR.

For information on RADAR & SISCOMEX go to radarsiscomex.com.br/

Source: Federal Revenue Service (RFB, Receita Federal Brazil) Website http://www.receita.fazenda.gov.br

Step 2: Import Permits & Licenses SOUTH AMERICA LINEHAUL Brazil uses the "Mercosur Common Nomenclature" (NCM) system to classify import duty and taxation

on imported products.

Importers must be aware of permit requirements and restrictions based on Harmonized System (HS) codes or NCM classification.

US Exporters should provide full descriptions and properly classify their goods on the commercial invoice while educating their Brazilian importers on their possible importation requirements.

Government agencies regulate some commodities, such as those related to healthcare (pharmaceuticals, cosmetics, medical devices) food, electronics, and machine/automotive parts.

Step 2: Import Permits & Licenses SOUTH AMERICA LINEHAUL Understanding the requirements for the government agencies is critical, i.e. Agência Nacional de

Vigilância Sanitária ANVISA (health), Ministry of Agriculture & Food Supply MAPA (agriculture), etc.

Useful Links: braziltradenet.gov.br/ClassicacaoNCM/Pesquisa/frmPesqNCM.aspx

Structure of the NCM Code Brazilian Product Code and Classification You can see the structure of the NCM code in the example.

00 00. 00. 0. 0.

Sub-item (8th digit of NCM)

Sub-position (1st six-digit of HS)

Item (7th digit of NCM)

Position (1st four-digit of HS)

Chapter (1st two-digit of HS)

Commodity Details SOUTH AMERICA LINEHAUL VALID DESCRIPTION

Errors on the Commercial Invoice will likely result in clearance delays and or inaccurate duty and tax assessments.

To avoid errors and potential delays, address the following questions: •  What is it? (Common and Scientific name and the HS Code) •  What is it made of? •  What is the product’s intended use or how will it be used? •  Reason for import. Reference the table for examples.

Commodity Details SOUTH AMERICA LINEHAUL

Items Sufficient Description Insufficient Description

CDR CDR Data disk CDR

Drive External CDR drive CDR

Electric Parts Repair parts for a jack hammer, stainless steel made Parts, repair parts

Gift Personal gift, photo stand Gift

IC IC, mounted, silicon, mixed, signal-digital, micro assembly parts IC, computer parts

IC Samples, IC electronic micro assembly parts Samples

Jewelry 18K gold necklace, mixed link Accessory

Memory Module Memory module, no Korean DRAM Memory module, computer parts

PCB Bare, PCB, populated PCB for laptop PC PCB, computer parts

Textiles Ladies, knitted sweater, 70% acrylic, 30% wool Sweater

Textiles – Marked Marked sample not for resale, ladies’ skirt, 100% cotton Sample

Textiles – Mutilated Mutilated sample 9811.00.60 ladies’ skirt, 100% cotton Skirt sample

Shoes Men’s tennis shoes, ankle non-covered, synthetic leather made Shoes

Wafer Silicon wafer, etched, unmounted Wafer

Digital Camera

Digital still image camera, Digital still image camera, unlimited sequential image capture less than 100 minutes

Digital camera

Step 3: Duty & Tax Payment

EXPRESS CLEARANCE REGIME FORMAL ENTRY CLEARANCE REGIME

FedEx has to advance D & T payments upon shipments’ registration into Brazilian Customs system for Express (Remessa). They are reimbursed to FedEx by responsible payer.

D & T are paid by Recipient upon shipment’s registration into Brazilian Customs system for Formal (SISCOMEX)

HS Code classification plays a vital role in calculating the amount of duties and taxes.

For this reason, it is important that the US Export Shipper properly identify and document the HS code classification on the commercial invoice to avoid duty and tax issues. These could impact the release of goods from customs and, ultimately, final delivery.

Government Agencies ~ ANVISA & Ministry of Agriculture & Food Supply (MAPA)

ANVISA

MAPA

Products for human consumption (medications, cosmetics, etc.,) require additional licenses to be imported into Brazil.

These licenses must be issued by ANVISA - Agência Nacional de Vigilância Sanitária, Brazil’s health regulatory body similar to the Food and Drug Administration (FDA) in the US. anvisa.gov.br.

Note: Granting import licenses for these products can take as long as 6 months.

Agricultural products are divided into two categories, chemical and biological.

Registration for chemicals takes 8 months. Registration for biological products takes 24 months.

Livestock products are characterized as biological and pharmaceutical products. Among the most traded are antibiotics, vaccines and antiparasitic agents. These licenses must be issued by Ministerio de Agricultura (MAPA) agricultura.gov.br/.

Note: The USDA’s Foreign Agricultural Service has offices in Brazil and can assist US exporters of agricultural products. Go to usdabrazil.org.br/ for more information.

Documentation Requirements

The Value of Documentation

Having the right documentation can make all the difference in your clearance experience.

•  The most common reason for clearance delays is insufficient, incomplete, or incorrect paperwork and information.

•  It is important to understand what is being shipped, the type of clearance regime and the role and responsibility of the shipper and the importer/consignee.

•  To avoid clearance delays the shipper and the importer must provide all required documentation.

EXPRESS CLEARANCE REQUIREMENTS

FORMAL CLEARANCE REQUIREMENTS

•  IAWB •  Commercial Invoice •  Importer’s Tax ID

•  IAWB •  Commercial Invoice •  Importer’s Tax ID & Broker Designee

•  Import Permits / Licenses •  Other Government Agency Forms •  Packing list

Important Notes for Documentation

INTERNATIONAL AIR WAYBILL (IAWB)

•  Important: To ensure DDP (Delivery Duty Paid), the IAWB duty and tax section must be marked “Bill Shipper.”

•  If “Bill Shipper” is not marked, then the consignee bears the responsibility for payment and clearance delays should be expected until payment is received.

•  It is only applicable for “Express Clearance Regime.”

COMMERCIAL INVOICE

•  A Commercial Invoice is required for all non-document shipments.

•  Important: For ‘samples’, the declared value (D/V) should be that of market value deducting profit.

•  D/V’s equal to $0 cannot be accepted and will cause clearance delays.

Take these helpful notes into consideration when completing your export documentation.

Important Notes for Documentation

PACKING LIST

•  A Packing List is recommended for all non-document shipments, multiple piece shipments and multiple commodities within a single shipment and is a detailed listing of the shipment contents for each package.

•  It is mandatory that the shipment is a multiple piece shipment that it be included with the shipment paperwork.

CERTIFICATE OF ORIGIN

•  The Certificate of Origin (COO) verifies the country in which the product was manufactured.

•  The product being exported and its destination country determine if the COO is required.

Take these helpful notes into consideration when completing your export documentation.

Documentation Details IAWB CI Packing List Certificate

of Origin Shipper (name, address, phone) ✔ ✔

Consignee (name, address, phone, TAX ID) ✔ ✔

Importer of Record (name, address, phone) ✔

RADAR number (Formal Entry Clearance only)

✔ ✔

Valid description & HS code ✔ ✔ ✔ ✔

Shipper Acct. to bill transportation ✔

Recipient account to bill Taxes and Duty ✔

Place and date of shipment ✔ ✔

Country of origin/manufacturing country ✔ ✔

Quantity, weight, packaging type ✔ ✔

Freight and insurance charges ✔

Other Declared Customs

Value

Currency used, Freight on Board

Value for each item

Order number, marks

Destination country

Helpful Clearance Tips

Exporter Checklist & Responsibilities

FORMAL ENTRY CLEARANCE REGIME IN BRAZIL

•  Ensure consignee is pre-registered in RADAR system and has obtained importer number

•  Include importer number on Commercial Invoice

•  Provide valid HS code and full description of goods

•  Identify broker of choice (broker select option or a FedEx broker)

As a US exporter to Brazil, you are responsible for the following:

•  International Air Waybill (IAWB)

•  Commercial Invoice

•  Packing List

•  Certificate of Origin (COO)

•  Electronic Export Information (EEI) for U.S.-Specific Shipper

Helpful Links and Resources

Helpful Tools & Resources

U.S. Government Export Portal export.gov U.S. Customs and Border Protection cbp.gov Office of the U.S. Trade Representative ustr.gov U.S. Census Bureau census.gov/foreign-trade/schedules/b/ Federal Revenue Service receita.fazenda.gov.br RADAR & SISCOMEX radarsiscomex.com.br/ ANVISA Agency Clearance gru.der.pr.gov.br/gru/ Brazilian Small Business sebrae.com.br

FedEx® International Shipping smallbusiness.fedex.com/international FedEx® Global Trade Manager fedex.com/GTM FedEx Export AgentFile® fedex.com/sed Regulatory News and Alerts fedex.com/us/international/regulatory-alerts/ FedEx InSight® fedex.com/us/fcl/pckgenvlp/insight/index.html

GOVERNMENT (US & BR)

FEDEX TOOLS & RESOURCES

More Ways to Get to Know Brazil

•  Find more export education events like this with FedEx Know and GrowSM: fedex.com/knowandgrow

•  Learn more about FedEx in Brazil at smallbusiness.fedex.com/brazil

•  Get advice on international shipping at the FedEx Small Business Center: smallbusiness.fedex.com/international

•  To contact the U.S. Commercial Service, go to export.gov/fedex

•  To learn more about FedEx and opportunities in Brazil, contact your local FedEx account executive or email FedEx Brazil at brsg@fedex.com (include city and ZIP in subject)