The Brazil Customs Challenge: How to Get Your Goods in and Get Paid

1. The Brazil Customs Challenge: How to Get Your Goods in and Get Paid Exporting to Brazil Manuel Viegas, President Capital Transportation & Technology Corporation

2. The Capital  . . Group has been established for over 30 years and operates around the world as an air/ocean Freight Forwarder, customs broker, warehouse & distribution management, and supply chain solutions. Capital's Corporate office is in Miami, Florida Capital’s network includes 25 owned/ offices in the South American Regionas well as representatives offices throughout Asian and Europe.

3. Capital Miami . . . Capital Leon Capital DF Capital Panama Capital Caracas Latin America Capital Medellin Capital, Bogota Capital Manaus Capital Lima. Brazil Fortaleza Capital Santa Cruz Belo Horizonte Capital RIO Franca We cover the Americas Sao Paulo Blumenau Capital Santiago Novo Hamburgo Capital Argentina Capital - Montevideo

4. AGENDA • Brazil • Difficulties when shipping to Brazil • Documentation and requirements • How important are your business partners including – Buying agent, Forwarder, Broker and Logistics provider. • It’s not so difficult if you do it correctly and have the correct partners.

5. Brazil • Location: Eastern South America, bordering the Atlantic Ocean • Area comparative: Slightly smaller than US (bigger than USA without Alaska) • Natural resources: bauxite, gold, iron ore, manganese, nickel, phosphates, platinum, tin, uranium, petroleum, hydropower, timber • Geography Note: Largest country in South America; shares common boundaries with every • South American country except Chile and Ecuador • Population: 192,335,000 • Language: Portuguese (official), Spanish, English, French • Government type: Federative Republic • Capital:Brasilia • Economy: Possessing large and well-developed agricultural, mining, • manufacturing, and service sectors, Brazil’s economy outweighs • that of all other South American countries and is expanding its • presence in world markets • GDP per capita: $12,917(2010 est.)

6. Brazil • Labor force: 89 million • Agriculture products: coffee, soybeans, wheat, rice, corn, sugarcane, cocoa, citrus, beef • Industries: Textiles, shoes, chemicals, cement, lumber, iron ore, tin, • steel, aircraft, motor, vehicles and parts, other machineries and equip. • Export: transport equipment, iron ore, soybeans, coffee, footwear, textiles, foodstuff, autos, leather and leather goods • Export partners: US 22.9%, Argentina 6.2%, China 6.2%, Germany 4.3% • Imports commodities: machinery, electrical and transport equipment, chemicals products, oil • Imports partners: US 20.5%, Argentina 9.6%, Germany 8.7%, Japan 5.4%, China 4.5% • Currency: Real (BRL) • Exchange rate: real 1.7 to USD est. • Main ports and harbors: Rio Grande, Itajai, San Francisco do Sul, Santos, • Rio de Janeiro, Vitoria, Salvador, Suape, Pacem, Fortaleza

7. DIFFICULTIES SHIPPING TO BRAZIL Shipping to Brazil and most countries in Latin America is easy as long as the importer, exporter/manufacturer are compliant with all the local, state and federal laws in Brazil. What will delay customs clearance and generate major cost and delays ? • Incorrect description of the products, incorrect manufacturing country (country of origin), incorrect information on the packing list including wrong weights, incorrect value or under valued merchandise ( to avoid duties), etc. • Incorrect or lack of the proper import licenses and shipping the cargoes without them.

8. Dealing with partners that are problematic due to their status with the Brazilian authorities due to previous irregularities including outstanding taxes or duties. The broker/logistics provider must be familiar with the local, state and federal legislation covering the product(s) being imported to ensure that before the cargo is shipped the importer/exporter are covered 100%, be it with Import Licenses if required, correct invoice(s) and packing list (s) 100% compliant with that state, port/airport import regulations, etc. At Capital with have in place filters ( Origin/Miami/Destination Office) that ensures that no cargo is ever shipped without the confirmation from the importer’s broker and the importer that everything is100% OK . We make sure that any discrepancies in the description of the product(s), marks and numbers, quantities, weight, are all corrected before shipping/arrival in Brazil.

9. DOCUMENTATION & REQUIREMENTS • The documentation requirements for Brazil are generally basic BUT MUST BE ACCURATE or severe penalties with major delays will occur. • The required documents are the Commercial Invoice and Packing List accepted in English with the following information: • The commercial invoice (INVOICE), which instructs the customs clearance, must contain:1) Detailed description of the goods, reference type, make, model, serial number etc.2) Gross and net weight.3) The unit value and total.4) A method of payment.5) A type of transport.6) Origin and country of origin.7) Name and address of manufacturer.8) Signature. • The Packing List, which instructs the customs clearance, and gives details per unit/case must contain: The same basic information as the invoice such as #1, #2, plus details of the contents per unit/case including CBM’s, marks and numbers, etc.

10. UPON ARRIVAL BRAZILIAN CUSTOMS WILL AGAIN CHECK AT DESTINATION THE FOLLOWING BEFORE ALLOWING CUSTOMS RELEASE: 1) Fiscal situation at the time of the importation of the importer including regularity in taxes, etc. 2) Habits of the importer when importing including regular origins, sellers, type of products, etc. 3) The nature, volume or value of imports. 4) The value of taxes on the importation. 5) Source, origin and destination of the goods. 7) Characteristic of the goods. 8) Operational capacity and financial good standing of the importer, and events that occur in other operations performed by the importer. 9) Due to irregularities on any of the above by the importer Brazilian customs might not allow the product to be customs released.

11. HOW IMPORTANT ARE YOUR BUSINESS PARTNERS Your business partners will be the key of your success. • Importer - Must be a legal authorized corporation allow to do business in Brazil. Can be a Brazilian Corporation or Trading Company - Must be a REI ( Registro de Importadores/Exportadores) registered Corporation/Trading by the Brazilian authorities. - Must have a good standing with the Receita Federal (Customs/IRS) as related to taxes, etc. - Should have RADAR ( Ambiente de Registro e Rastreamento da Atuacao dos Intervenientes Aduaneiros). • Customs Broker - Must be familiar with the industry/products being shipped as well as the local, state and federal laws at the port/airport or entry. • Logistics provider - Must have a good understanding of the import laws in Brazil including at the port/airport of entry and make sure that all documents required, licenses, weights, CBM’s etc. are OK before shipping.

12. COMMERCIAL INVOICE EXAMPLE

13. PACKING LIST EXAMPLE

14. Thank you for your time today. Capital ... Manuel G. Viegas President Phone/Mia: 305-597-2300 Fax: 305-597-2311 Cell: 646-391-5705 Email: mviegas@capitaltrans.com SKYPE: manuel.g.viegas WEB: www. capital-corp.com A C-TPAT VALIDATED COMPANY - SVI# capCon 128810