By Michela DellaMonica and Claire Rivé, Contributing Reporters
RIO DE JANEIRO, BRAZIL — The Brazilian Federal Reserve has introduced a solution for the temporary entry of goods for the FIFA World Cup in June and the 2016 Olympics. Items entering the country needed for international sporting events such as production equipment and sporting gear will now have a simplified import admission system that will allow companies to forgo import taxes and ultimately save time.
Under the new rule, goods will go through a warehouse customs procedure and be admitted only for the duration of the specific events. This system will remain in place for future major exhibitions, fairs, and conferences.
In a statement, the Receita Federal (Brazil’s Internal Revenue Service) explained that the change was possible because the government agency considered the locations of the international events as temporary customs precincts. Importation to Brazil is widely considered expensive, partly due to taxes and fees along with the length of time it takes, which on average, currently takes approximately thirteen days to reach customs.
“Our last experience took more than four weeks to go through customs, even with air freight which is a faster way of transportation,” says Mathieu Piques of Europartner Brazil. “I think that all companies going through this will experience at least five importation hold ups in customs.”
Apart from the import procedure, exportation faces its own challenges in a notoriously bureaucratic system. Last month, the National Confederation of Industry (CNI) published a report that showed that up to twenty-six different types of documents can be requested during the lengthy process of exportation in Brazil.
The research surveyed 693 industrial companies, and all ports in Brazil. Apart from issues with exportation, inefficient infrastructure and logistics systems, high taxes and exchange rates were cited as contributing to the delays which affect up to forty percent of countries.
The process in Brazil is so complex, that almost all businesses that work with exports find it necessary to contract despachantes (special services) to deal with customs. Only three percent of export companies manage without such help. Problems in the analysis and processing of documents required for export usually cause delays in the inspection and surveying of exports, affecting almost forty percent of companies, according to the CNI research.
For the most part, imported goods do not require an Import License and are subject to automatic licensing through SISCOMEX (the government’s integrated foreign trade computer system). Complete and correct documentation expedites clearance through customs within ten working days from the date of registration. The new system for major events only simplifies the customs procedure.
“In the long-term, nothing has changed,” says Eduardo Valenca of Wilson Sons Logistics. “In my view, this is a temporary measure which simplifies the customs procedure to facilitate the realization of these events in the country and not the import of goods in general. In practice, the promoters of these sport events, for instance, may request a ‘temporary’ customs area of where the competition will be held.”