Brazil working toward adoption of ATA Carnet
March 23, 2009
World Trade\Interactive
Sandler & Travis Trade Advisory Services’ Sao Paulo office reports that Brazil is moving toward adoption of the ATA Carnet. This so-called “merchandise passport” allows duty-free temporary imports of merchandise and equipment. While Brazilian law already allows for such treatment there is a lot of bureaucratic red tape involved, making it difficult to conduct certain types of foreign trade. Now, however, following an analysis by Brazil’s internal revenue, foreign trade (Itamaraty) and civil cabinet authorities, the Brazilian Congress is considering the adoption of the Istanbul Convention governing the use of ATA Carnets.
In the 80+ customs territories that accept them, ATA Carnets allow duty-free, tax-free imports of commercial samples, professional equipment and goods displayed at trade shows that are re-exported within 12 months. As a standard international customs document the ATA Carnet helps minimize delays at time of entry, eliminates the need for financial guarantees and reduces the risks associated with carrying large amounts of foreign currency. According to the U.S. Council for International Business, over 155,000 ATA Carnets were issued worldwide in 2007 covering goods valued at almost $12 billion.
STTAS states that these benefits provide great advantages compared to Brazil’s current system for temporary importations. This system allows full or partial suspensions of import taxes provided that (a) the goods are imported “without foreign exchange coverage,” (b) the purpose of the imported goods is specified, and (c) the goods will only be used in Brazil for a set amount of time. Import taxes are suspended completely for goods that are admitted for fairs, exhibitions, congresses and other scientific or technical events; scientific research or expeditions; performances, exhibitions and other artistic or cultural events; trade and industrial fairs and exhibitions; and trade promotion, including samples with no commercial value. A partial suspension is available for goods imported for “economic purposes” or destined for use in industrial applications, such as machinery to be used temporarily in a manufacturing operation. In both cases importers must provide a financial guarantee for the suspended taxes.
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