7 biggest mistakes companies do when importing in Brazil
The volume of imports has been growing a lot in Brazil in the past years. Also, a new profile is emerging in the segment. Individuals, small and medium-sized companies are the ones contributing for this increasement in the country. Unlike large industries – that already have all the processes well implemented – this group is usually not aware of all the requests needed to import products in a protectionist country.
Thinking of that, we have listed the most common mistakes companies make when importing so you can be aware and prepare a good strategy to expand your business to Brazil.
1. RADAR Habilitation and Regulatory Agencies
Many beginner importers forget to check the import limit granted by the RADAR Habilitation and also to if the product or the company needs any special registration or license in Regulatory Agencies such as Anvisa, MAPA, etc. In these cases, the goods often arrive in Brazil and the importer is unable to release the products, generating high storage costs and, in some cases, the loss of the goods.
2. Shipment of cargo without notifying the importer
In some cases, exporters ship the cargo and do not notify the importer or do not send a copy of the bill of tranport (BL, AWB, CRT) so that the importer can verify the data, monitor arrival, redirect the container to a terminal with negotiated table. This type of situation can generate costs in the correction of documents, correction of information in the Federal Revenue systems (Mantra, Siscarga) and the high cost of storage in the Primary Zone while waiting to release the process.
3. Verification of NCM and Import License Prior to Shipping
We are often faced with an inaccurate classification of the imported goods. This happens because, in some cases, the exporter informs an HS Code that is incompatible with the NCM adopted in Brazil which can lead to problems and fines or even, in clearance, rectification of the DI for reclassification of the goods.
In Brazil, it is mandatory to include the NCM in the BL and Siscarga (only the first 04 digits) before the arrival of the cargo in the country. When not correctly informed, there is a need to correct the BL, Siscarga and the extra correction costs are charged by shipowners and freight forwarders.
4. Origin of Goods
Another important point that often generate problems in the clearance is the origin of the goods.
The Receita Federal requires that should be informed in the documents and in the import declaration:
- Country of origin, which we can define as: the place where the goods are produced/manufactured;
- Country of purchase, which we can define as: the place where the supplier/seller is domiciled;
- Country of origin, which we can define as: the place where the goods were to be shipped at the time of their acquisition
5. Error issuing documents
The point of great concern for importers is regarding the issuance of documents and the mandatory information that must be included in the documents. According to the Receita Federal, the information that must appear on the invoice is (art. 557 of Customs Regulation):
- full name and address of the exporter;
- full name and address of the importer;
- specification of the goods in Portuguese or in the official language of the General Agreement on Tariffs and Trade, or, if in another language, accompanied by a translation into Portuguese, at the discretion of the customs authority, containing the proper and commercial names, with the indication of the elements essential for perfect identification. The official languages of the General Agreement on Tariffs and Trade are English, French and Spanish;
- brand, numbering and, if any, reference number of the volumes;
- quantity and type of packages;
- gross weight of packages;
- net weight of packages;
- country of origin;
- country of purchase;
- unit and total price of each type of merchandise and, if any, the amount and nature of reductions and discounts granted to the importer;
- freight and other expenses related to the goods specified in the invoice;
- terms and currency of payment; and
- term of sale condition (INCOTERM).
6. Use of wooden packaging and pallets
Another critical point when importing is the use of wooden packaging and pallets, as they must be treated in accordance with the International Standard for Phytosanitary Measures N° 15 (NIMF15).
In the case of wooden packaging and pallets, without due treatment and respective stamp, the exporter is obliged to return the cargo, or if possible, dissociate the packaging from the cargo, and arrange for the exportation of only the wood to the country of origin, having to bear all the costs of the operation.
7 – Incoterm DDP – DELIVERED DUTY PAID
Due to the fact that the foreign seller does not have the legal conditions to provide clearance for the entry of goods into the counry, this term cannot be used in Brazilian imports, and the DPU or DAP must be chosen in the case of preference for a condition disciplined by the ICC.
In order to avoid committing these common mistakes it is highly recommended that your company finds a trustable local partner to help with all the import process. Novatrade has a prepared team to follow you along the way.
