What is Bonded Warehouse?

Bonded warehouses, also known as bonds, is an aera where shippers can store imported goods before customs have processed them.

The payment of the import duties for the good stored is suspended until the customs clearance of the product.  Therefore, working with a bonded warehouse can make supply chain management and cash flow more straightforward and efficient as you can deliver your goods closer to their final destination and that duty payments can be postponed until the product has been moved. 

Generally, there are two kinds of bonded warehouses: wet and dry. Wet bonded warehouses allow for the storage of alcohol and tobacco. Dry bonded warehouses can store most other imported goods. 

Let’s see how bonded warehouses work in Brazil.

What is a bonded warehouse regime in Brazil?

Bonded Warehouse is a Special Regime through which the Federal Revenue of Brazil (RFB- Receita Federal do Brasil = Brazilian tax and customs authority body) allows importers and exporters to store their cargo in a customs or authorized place, so that they can carry out the customs clearance of their products with a longer period than usual, or do it partially. Likewise, it makes it possible to suspend taxes, both federal taxes and ICMS, until the process is fully completed.

The goods may be stored for a maximum of 24 months (2 years), taxes will only be collected at the time of customs’ clearance (sale).

Because this regime deals with goods that have not yet been nationalized, it allows the storage of these loads to occur only in a bonded or authorized location, for example:

  • port facilities;
  • bonded warehouse;
  • the ports and airports.

Although these three possibilities exist, it will often be much more viable to store the products in a bonded warehouse whose costs are much more competitive than port or airport terminals. The Bonded warehouse may be also referred to as a « Dry port » or “Free trade zone”.

Requirements to benefit from the bonded warehouse regime

It is important to note that only a Brazilian company with a RADAR import permit can make the necessary records to establish a stock of product under the bonded warehouse regime.

And it will be the same for customs clearance.

A foreign company is not allowed to have a RADAR import permit and will be unable to do these procedures.

In the case a foreign exporter wishes to set-up a stock in bonded warehouse regime in Brazil, he will need a local importer of record partner to make such register. On the other hand, it worth mentioning that such register does not transfer the ownership of the goods to the local import of record.

The foreign exporter remains owner of the goods up to their clearance.

Process to set-up a stock of goods in a Brazilian bonded warehouse and customs clear it.

In order to benefit from the advantages that this type of procedure makes possible, this decision needs to be taken before shipment, in cases of importation. This is necessary so that the Brazilian certified importer can guide the foreign exporter regarding the correct completion of the required documents, both for importing and for proceeding with the cargo registration (called DTA or DTC) in this special regime, to enable transport on the territory of customs uncleared goods.

Thus, when the merchandise arrives in Brazil, the customer broker (“Despachante” in Brazil) must register the Declaration of Admission (Declaração Aduaneira) (DA).

At this point, the products have been registered under the bonded warehouse regime thanks the import permit RADAR of the Brazilian importer, but as mentioned previously, the property remains that of the foreign exporter who retains the right to be able to reroute the goods to another destination at any time, without having to pay any taxes for this.

After the process has been approved by the RFB, the goods are ready to be sold and cleared through customs.

Sales can be made partially and for different Brazilian customers, as long as they have a RADAR.

For this, the foreign exporter issues a commercial invoice to the Brazilian customer which will serve as the legal basis to allow the latter to clear the goods indicated on this invoice and register the import declaration (DI).

This invoice is therefore CIF, as the foreign exporter can only be held responsible for the costs of the goods up to the bonded warehouse. Payment of import taxes will be the obligation of the Brazilian importer.

The CIF value invoiced may vary from one customer to another depending on the commercial negotiations between the parties, insofar as it respects the transfer price rules and does not under-invoice the products.

It is interesting to know that each shipment of goods will be subject to a different DA which cannot be merged.

So, for example, if a foreign exporter sends a stock A the first month and a second stock B the second month; two DAs will be registered separately and cannot be merged.

Consequently, if a Brazilian importer subsequently wishes to buy part of the products in stock A and another part in stock B, he will have to do two separate customs clearances, which can multiply the fixed costs of the customs broker (~ BRL 1,000 per customs clearance) .

So, pay attention to the product mix and the turnover of its products so as not to multiply the customs clearance processes.

Similar Posts

Talk to our specialists and learn how we can help your business grow and thrive in Brazil.

Please, tell us about your project to receive feedback.