China is one of Brazil's most important trading partners. In this article we will outline the complete process of importing Chinese electronics to Brazil.
Although most of the major electronics manufacturers have facilities in Brazil, the Brazilian electronics industry is largely composed of assembling plants for imported electronic components.
Although Brazil impose significant import taxes, especially for completed electronic goods, Chinese electronics normally reach the Brazilian market at a competitive price point.
Exporter in China
The export of electronics out of China does not require a special Export License, except when their components are made of one of the following materials:
- Rare earth elements
In these cases, the company will require an Export Quota License (出口配额许可证, Chu kou pei e xu ke zheng) - for tungsten, tin and rare earth elements - or an Export Quota Bidding License (出口商品配额招标政策, Chu kou shang pin pei e zhao biao zheng ce ) - for platinum.
The government bodies responsible for the approval and issuing of Export Licenses are:
- Ministry of Commerce (商务部, Shang wu bu) and its Special Commissioner’s Office (特别专员办事处, te bie zhuan yuan ban shi chu) in major ports
- Administration Department of Foreign Trade and Economic Cooperation (对外贸易经济合作厅, dui wai mao yi jing ji he zuo ting) in provinces, autonomous regions and municipalities
Applicants for an Export License must submit an application to the government bodies stated above alongwith the following documents:
- Description of the goods
- Country of destination
- Unit price
- Total price of the operation
- Delivery date
- Form of payment
You are also required to present the sales contract as well as the approval for foreign trade issued by the competent department or bureau at provincial level.
When applying for an Export License for the first time, you must also provide the license approving the operation of the company as well as the Company’s Bylaws.
For Foreign Invested Enterprises (外资企业, wai zi qi ye), the FIES, the documents of approval are the project contract, the business license as well as the annual export plan submitted to the National Ministry of Commerce. These must be provided when applying for an Export License for the first time.
Normally, the Export License is issued within three working days once the application forms reach the government’s responsible body.
The Export License is valid for six months after its release but is only valid until the 31st of December of the year it was issued. So, if an Export License is issued on the 1st of October, it is still only valid until the 31st of December of that year. If an export license is not used during the valid period, the operator can apply for an extension during the valid period of the export license and a new export license will be issued. In general, each Export License can only be used for one batch of goods. However, the license can be used for multiple batches - up to a maximum of 12 - under certain circumstances, including goods of Foreign Invested Enterprises.
Importer in Brazil
Before a Chinese company can ship any product to Brazil, it will need to contact a company in Brazil that will be the legal importer of the electronics, which should hold all the necessary licenses to import products.
All importers in Brazil must first be registered at the Secex, the Foreign Trade Secretariat, through the Siscomex, the Foreign Trade Integrated System. Siscomex is a system responsible for registering, monitoring and controlling international trade in and out of Brazil. In order to access the Siscomex system, the Brazilian importer will need a RADAR - Ambiente de Registro e Rastreamento de Atuação do Intervenientes Aduaneiros, Portuguese for Ambient for Registration and Tracking of Activities of the Customs Agents.
Radar licenses include importers and exporters in the Siscomex System. With such a system, foreign trade operations, customs, accounting and fiscal information of all companies are available at anytime to fiscal auditors working for the Federal Revenue Service. The different kinds of RADAR licenses are:
- Limited RADAR, imports can not exceed USD 150.000 over a six month time period
- Unlimited RADAR, for entities whose financial capacity is larger than USD 150.000 and whose imports may exceed USD 150.000 over a six month time period
- Express RADAR, for specially regulated activities with direct government oversight
Import documentation in Brazil
When importing to Brazil, three different documents may be requested:
The Import Declaration is the base document of the imports clearance, formalized by the importer through Siscomex, at the moment of the goods clearance. The import declaration is required for all import processes and comprehends the complete set of information - regarding commercial details, currency exchange rates and taxes which are needed to analyse the operation.
The Import License is a document that contains information about the goods that will be imported and the import operation in general, as well as information about the importer, exporter, country of origin, tax regime, currency exchange and others. The Import License is an electronic document that must be completed on the internet by the importer or by its customs broker, on the SISCOMEX system. Granting it may be automatic or non-automatic, in cases of specific products.
Electronics will be granted an automatic Import License, meaning that the Import License can be requested after the shipment of the products from China to Brazil, but prior to the customs clearance.
The Proof of Import is the document that effectively promotes the nationalization of the goods imported. It is also an electronic document, issued by the Federal Revenue, and that proves the effective nationalization of imported goods, through the payment of taxes when due.
When importing electronics to Brazil, it is expected that the goods follow Brazilian norms and standards. This is certification that needs to be obtained before the goods are commercialized in Brazil. The main regulatory bodies for electronics is Anatel and Inmetro.
Telecommunication products and accessories are required to have a certification and homologation by the Brazilian Telecommunication Agency, Anatel, in order to be legally commercialized and used in the country. The definition of “telecommunication product” can be very broad, so Anatel defines it as equipment, apparatus, device or element that comprises the means necessary or sufficient to achieve telecommunication. Telecommunication is the wired, wireless, optical or any other electromagnetic process that transmits, emits or receives symbols, signals and any other information.
Thus, by this definition, products such as cell phones, modems, wi-fi routers and even RC toys and walkie-talkies need homologation by Anatel to be commercialized in Brazil. Telecommunication products must also have their parts and accessories, such as batteries and charging cables tested and homologated separately.
Complete information on how to obtain an Anatel certification and homologation can be found in this article.
Other electronics are also subject to certification and homologation before entering Brazil. Inmetro, the Brazilian National Institute of Metrology, Quality and Technology, is responsible for compulsory homologating and certifying all products related to electric power transmission and all products containing LED lamps. All computer devices and apparel are under the Voluntary Certification regime by Inmetro, thus their certification is not compulsory.
To receive the Inmetro certification and homologation for a product, the company must contact a OCP, a Product Certification Body, accredited by Inmetro, in order to certify and homologate the product.
It is important to note that Chinese banks do not work with IBAN, the International Bank Account Number, which is most commonly used in America and Europe. Chinese banks use BIC/SWIFT codes for international transfers.
Money can be transferred to the exporter in China via bank transfer by payment order. With this method, the importer must have the SWIFT code of the bank where the exporter wants to receive the payment. The costs are borne by both the importer and the exporter and both need to hold bank accounts in the respective banks.
The import of a product must not be released until the importer issues a remittance to the Chinese exporter. It is only with the remittance in hand that the Chinese exporter should issue a commercial invoice and an export order. The full payment of the goods must be cleared out of Brazil through the Brazilian Central bank in order to avoid problems during the customs clearance of the goods into Brazil.
Packing of Goods
The following documents must be prepared in either English or Portuguese for customs clearance accepting it in Brazil:
- Airway Bill or Bill of Lading
- Packing List
- General Certificate of Origin, certifying the producing and manufacturing place of the exported products. In China, all exporting products following the Regulation of Place of Origin for Import and Export Commodity in People’s Republic of China can apply for a General Certificate of Origin. This document helps the customs authority to decide on a tariff and treatment given to the products, as well as proving the quality of the product
- Copy of the Import Declaration
- Identification of Importer
- Invoice number
- Place and Date of Dispatch
- Quantity shipped
- Full description of all items including brand, serial and part number
- Unit price: Every individual item in U.S.Dollars
- Total price
- Harmonized System and Mercosul Common Nomenclature code for each invoiced item
- Gross & Net Weight
- Total FOB Value
- Total Freight Charge
- Total Value
When completing the documents, the exporter should be as specific as possible. Brazilian customs will not accept information such as “freight agreed by both parties” or other similarly vague terms. The invoice and packing list must be issued on a company letter headed paper, stamped and signed. Copies are not acceptable even with an original signature.
A sworn translated version of all the documents must be provided to the Brazilian customs agency should the documents not be in Portuguese or in English.
Taxation and Classification
Brazil, together with Argentina, Paraguay and Uruguay adopts the Mercosul Common Nomenclature, the NCM, which is based on the international method of product classification, the Harmonized System. The classification of goods define the percentage of taxes like IPI, ICMS and Import Duty that will be paid, and what will be the competent organization in charge of authorizing the import. Each product classified in NCM/HS will be issued a specific import license, by a specific governmental institution.
Just like in the HS classification system, electronics are categorized under chapters 84 and 85 in the NCM (Mercosur Common Nomenclature) system.
Generally speaking, the following tax rates will apply when importing electronics from China to the state of São Paulo in Brazil:
- Import Duty: 0% - 20%
- IPI: 2% - 15%
- ICMS: 18%
- PIS: 1.65%
- COFINS: 7.60%
For more detail about tax rates and classifications according the NCM system, please have a look at our Tax Index.
Customs Clearance in Brazil
Before the goods arrive in Brazil, the importer will have to pay the liable taxes to Receita Federal, the Federal Revenue Service of Brazil, including Import Duty, IPI, PIS, COFINS and ICMS. With the confirmation of payment to the Federal Revenue and all the other documents that the importer amassed during the process, the customs clearance may be realized.We would like to thank Daxue Consulting for the background information to this article.