How to Export to Brazil - Sprint Lazio

Brazil – Ministry of External Relations
As for the use of letters of credit, the Brazilian importer habitually attempts to persuade
the exporter to avoid this form of payment, as the bank charges and the requirements
for local guarantees in Brazilian banks are very stringent and this may make the
transaction unfeasible.
In the case of the South American exporter, the payment by means of a letter of credit
has an advantage: there is no need for a confirmation of the credit, due to the Reciprocal
Lending Agreement – CCR existing in Latin America with the participation of the
central banks. All that is needed are the guarantees from the issuing bank and the
irrevocability of the document.
It must be stressed that the requirements and instructions set by Brazilian importers
on letters of credit are objective, direct and without major complications, with a focus
on the shipment time and the documents that the exporter needs to present to the
bank. Occasionally, an inspection of the cargo prior to shipment may take place,
which is conducted by an inspection firm of international renown. However, merchandise
inspection prior to shipment in the port of origin is not mandatory in Brazil.
It must be noticed as well that the South American exporter must closely follow the
requirements in documentary credits, as any discrepancy, in addition to halting
payment, may harm the importer from the logistic and customs viewpoint, which
includes fines and penalties provided for by customs regulations and imposed by the
Federal Revenue and Customs Administration during the process of nationalization.
In case of litigation and controversy between the parties, depending on the form of
payment, the issue can be settled in the light of the rules of the International Chamber
of Commerce – ICC rules or, if there is no agreement, by judicial means within the
jurisdiction chosen, which can be the supplier’s or the buyer’s country.
IV.3. Government procurement
In any country, the government is a major client and that is not different in Brazil. In
addition to the Brazilian Federal Government, there are 26 state governments, the
Federal District government and over 5,500 municipalities, some of which are quite
large. At any government instance, procurement is regulated by the federal Law no.
8,666, dated 21 July 1993, which establishes the need for bidding processes for
these purchases, whether of goods or services, including those originating abroad.
The Ministries, mixed-capital companies, autonomous State companies and state
agencies are required to conduct import operations by publishing government
procurement opportunities and inviting interested parties in participating in a public
pricing bid. The selection criteria depend on the content of the announcements, but
the criterion of lowest price is normally prevalent, provided the product’s technical
requirements and the supply conditions are met. In the case of a tie between the
proposals presented by a national firm and a foreign one, the law will favor the national
product.
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