From the perspective of this system, It is the importer's responsibility to decide which regime they wish to subject the foreign goods to upon arrival in Brazil.

At this point, it is important to highlight the importance that should be given depending on the type of import adopted. This will be a major turning point, both for import costs and for the necessary commercial and legal adjustments. Everything will depend on the business objective of the import.

Importers commonly face audits by the Federal Revenue Service, which are, incidentally, quite strict, without knowing the real reason.

In truth, you, the importer, may not have followed the best procedure or fulfilled all the legal requirements.

To reiterate: legal regulations are extensive and complex, especially in their interactions. It's always advisable to have a good legal team to assist you in the best structuring and development of your business.

Experts circumventing the legislation can allow your business to increase its profit margin and also prevent your company from being held liable for potential damages, for example. Concealing the true buyer is punishable by forfeiture of the goods and a fine. and also with possible criminal charges.

The tax office itself provides one. Import Manual where it provides information on the legislation that must be followed, the systems to be adopted, and conceptual definitions on the subject.

For those starting out in international trade, it's important to keep in mind the long journey ahead, not only in adapting the company to legal requirements, but also the long journey of the imported product itself. Imported goods travel a long way, from export to delivery to the importer—you. For example:

Importers frequently encounter inspections of their goods, which may include: green, yellow, red or gray channel. These are the so-called parameterization channels:

• Green, through which the system registers the automatic clearance of the goods, dispensing with documentary examination and physical verification of the goods. The DI selected for the green channel in Siscomex may be subject to physical or documentary verification when evidence of irregularity in the importation is identified by the AFRFB responsible for this activity;

• Yellow, whereby a documentary examination must be carried out and, if no irregularity is found, customs clearance is effected, dispensing with the physical verification of the goods. In the event of an incomplete description of the goods in the Import Declaration (DI), which requires physical verification for its perfect identification in order to confirm the correctness of the tariff classification or the declared origin, the Federal Revenue Service Auditor (AFRFB) may condition the conclusion of the documentary examination on the physical verification of the goods;

• Red, whereby the goods are only released after the completion of the documentary examination and physical verification of the goods; or,

• Gray, which requires the examination of documents, physical verification of the goods, and the application of a special customs control procedure to check for signs of fraud, including with regard to the declared price of the goods.

Thus, the analysis can yield many results, and the importer under investigation is solely responsible for them.

In conclusion, it can be said that the complications inherent in business are not limited to commercial issues, but mainly to the difficulties and penalties that may arise from them. It is no coincidence that the Federal Revenue Service provides a lengthy [document/information/guidelines/etc.]. list of punitive infractions ($$$$).

Be alert and well-informed!

Written by Fabrício Norat, Lawyer, graduated in Law in 2014 from FMU/SP. Area of Expertise: Customs Law and Tax Law, OAB: 431.023.

If you have any questions, please contact our specialized team so we can assist you.