Brazil has always taken heavy measures against the non-compliance with tax and customs regulations, especially by applying heavy penalties. To this effect, the customs authorities, sometimes accompanied by the federal police, are known for carrying out rigorous inspections to check the compliance with all applicable rules.
In this context, the Brazilian Federal Revenue Service (RFB) issued Normative Instruction 1986/2020 to address the inspection procedures used to combat customs fraud. Although combatting customs fraud is nothing new, this important regulation updates procedures governed by the 2006 and 2011 rules.
Normative Instruction 1986/2020 provides for broad customs’ audit powers, which may be carried out before the goods are subject to custom clearance, during such proceedings, and even afterwards, provided that the statute of limitations applicable is respected.
Based on this, the customs authority, among other measures deemed necessary, may:
Moreover, the RFB regulated procedures for the retention of goods for up to 120 days, as well as for the seizure of goods, when there is evidence of customs fraud.
Customs fraud in Brazil is strongly combated and subject to heavy penalties. Accordingly, based on the procedures established by Normative Instruction 1986/2020, if the customs fraud is confirmed, the liable parties may be subject to consequences such as: seizure of goods; tax assessments; administrative sanctions (for example, suspension or revocation of the right to engage in foreign trade); tax representation for criminal purposes; and representation for declaration of unfitness of registration in the National Register of Legal Entities (CPNJ).
Combatting customs fraud is to be taken seriously, and thus such procedures are considered to be good news. Nevertheless, investigations should aim at identifying and punishing actual customs fraud rather than punishing legal interpretation diversions or mistakes made by importers and exporters.
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