At Brazilian customs, when dealing with goods, currency or vehicles there is a risk that these may be confiscated by the Brazilian Treasury. In this article, we will take a closer look at the Confiscation Penalty which may be applied in Brazil.
As we have already seen in this article, there are several reasons why goods can get stuck at Brazilian customs. And, under certain circumstances, these goods may be subject to a certain penalty called Pena de Perdimento, which is Portuguese for Confiscation Penalty. It is important to mention that vehicles and currencies are also subject to the Confiscation Penalty.
All goods, vehicles and currencies subject to the Confiscation Penalty will be held by order of the Minister of Treasury, as a cautionary measure in the interests of the Brazilian Treasury.
Reasons for the Confiscation Penalty on goods
Goods that get stuck at Brazilian customs have a maximum deadline to be cleared, otherwise the Confiscation Penalty will be applied by Receita Federal, which is Portuguese for Federal Revenue Service. If the goods are not cleared within the specific deadlines, they can either be seized by the Federal Revenue Service and then auctioned or destroyed. The maximum deadlines are as follows:
- 90 days after landing, if the customs clearance processwas not initiated
- 60 days from the date of suspension of the customs clearance process, by act or omission of the importer or their representative
- 60 days from the date of notification of the owner of the goods from shipwrecks and other accidents
- 45 days provided that the traveller does not start customs clearance process of goods
Apart from those already mentioned, there are several other reasons why goods can have the Confiscation Penalty applied:
- Hidden goods, on board of a vehicle or inside a customs clearance zone
- Goods on board a vehicle that were not registered on a Bill of Lading or equivalent document
- Goods that had any of the clearance or unloading documents falsified or adulterated
- Goods that were modified to avoid or hinder the identification, even in cases when this modification does not affect the product tax classification
- Foreign cargo arriving in Brazil with false declaration of content. The declaration of content is a document issued by the exporter or by the transporter, prior to customs clearance, and containing information about all imported goods
- Foreign goods that offend Brazilian morals, good customs, health or public order
- Foreign goods imported without an Import License, or equivalent document, whenever its issuance is prohibited or suspended due to specific legislation
- Fraud or concealment regarding the seller, the buyer or the person responsible for the import or export of the goods
- Goods that had their import prohibited due to specific legislation
- Diamonds under classifications 7102.10, 7102.21 or 7102.31 in the Harmonized System at the moment of customs clearance, or in possession of an individual not holding a Kimberley Process Certification Scheme
- Prohibited goods, when introduced to a ZPE - Export Processing Zone
The Confiscation Penalty will be converted into a fine equal to the customs value of the goods that receive the Confiscation Penalty, in cases where these goods can not be found or have already been consumed.
The Confiscation Penalty in other cases
It is worth mentioning that the Confiscation Penalty can be applied in other cases as well.
Confiscation of vehicles
The Confiscation Penalty can be applied to vehicles, for different reasons:
- An illegal vehicle performing navigation or any other kind of international transport
- A national or foreign vehicle unloading its cargo, outside of any port, airport or other facility in which the unloading operation is not authorized
- Whenever a vehicle approaches another one in a customs zone, in order to receive people or cargo, without following the legal procedures. In this case, at least one of the vehicles must be coming from abroad
- A vessel sailing near a port without showing on its hull, in a highlighted and visible way, the registered name of the vehicle
- A vehicle transporting goods subject to the Confiscation Penalty, in case the vehicle is also owned by the person that had their goods confiscated
- Whenever a land vehicle used in the transit of foreign cargo is diverted from its legally approved route without a justified reason
Confiscation of currency
The Confiscation Penalty will be applied to any non-declared currency in cash, be it Brazilian or foreign, above the amount equivalent to BRL 10.000, either entering or exiting Brazilian territory. Although, there may be some specific legal procedures in which this may be legal, like declaring the currency, for example. Securities, as well as regular and travel checks are not considered in this case.
The Confiscation Penalty may be applied to currencies that are in international transit, provided that the circumstances make clear the attempt to exit or enter the country illegally. Should any person wish to enter or exit Brazil with values higher than BRL 10.000 or the equivalent in foreign currencies, they should complete a Declaração Eletrônica de Bens de Viajantes, which is Portuguese for Electronic Travelers’ Customs Declaration, the e-DBV. They should then present themselves to the Federal Revenue Service’s office responsible for the zone where they will enter or exit the country.
Improper application of the Confiscation Penalty
It is important to mention that the Federal Revenue Service auditors may sometimes apply the Confiscation Penalty in cases not mentioned above, for instance as a replacement for the fine applied due to a misclassification given to a cargo. In these cases, the person responsible for the import operation has up to 20 days to provide documents to prove that the Confiscation Penalty does not apply. If this does not happen, the goods will be confiscated. After this, the Federal Revenue Service will then proceed to submit the case to trial before a Court.