Special Customs Regimes – Part II
This regime provides for warehousing of foreign goods in a public customs house through suspension of the applicable import duties.
The key advantage of the regime is that it offers the opportunity for partial nationalization of goods as they are sold.
In addition to warehousing, goods authorized entry under this regime may be used in the following operations:
- Exhibits, demonstrations, and tests;
- Processing activities; and
- Maintenance or repair work.
Allows for the warehousing of foreign goods in customs houses for the purpose of ensuring trade flows between neighboring countries and third countries.
The regime is only authorized under international treaties or agreements signed by Brazil. To date, agreements have been concluded between Brazil and Paraguay and Bolivia. Duty-free warehousing facilities have been placed into operation in the Port of Santos and Paranaguá and are currently being used by Paraguay for goods exported to and imported from other countries.
The operation enables importers to purchase goods from exporters with instructions that the goods be forwarded to third countries without passing though Brazilian territory.
The purchase, known as back-to-back, is executed on behalf of the Brazilian importer and must be duly authorized by the Central Bank and the Foreign Trade Department – DECEX, as it constitutes a financial transaction not involving physical transport of the goods through Brazilian territory.
Back-to-back credits offer the following advantages:
- Logistical – reduced freight, insurance, and other costs;
- Faster delivery times; and
- Lower financial and foreign exchange costs.
This regime waives the applicable import duties for the movement of goods under customs control between two points in Brazil.
Customs transit is employed to transport imported goods which have not yet been nationalized from a port, airport, or border checkpoint to a designated customs clearance unit.
Similarly, the regime is applied for the movement of exported goods from the designated customs clearance unit to the respective port, airport, or border checkpoint.
Special Computerized Industrial Warehousing Regime (Regime Especial de Entreposto Industrial sob Controle Informatizado – RECOF)
RECOF enables direct delivery of imported goods to the importer’s fiscal domicile, through suspension of the applicable duties under the customs transit regime, for use in industrial processing, manufacturing, and assembly activities.