Greater Scrutiny by Customs over Illicit Funds

Written by | Corporate, Tax and Customs

The Brazilian Federal Revenue Department (Receita Federal do Brasil, “RFB”) Normative Ruling 1,678/2016 (“NR 1,678/2016”) sets out the rules for inspection, investigation and enforcement of transactions involving fraudulent intermediation of third parties when exporting/importing goods. Companies that are not compliant will tax filings, or that are not able to submit evidence of their financial capacity to carry out the transaction or the volume of transacted goods, will be subjected to a special inspection procedure.

If the inspection procedure takes 90 days or longer the importer will be allowed to provide the RFB with security for the estimated liabilities and clear the goods. The security provided must take the form of a deposit, a bank guarantee or of an insurance having the Federal Government of Brazil as its beneficiary. It must contain an irrevocability clause, a guarantee renewal clause and a clause of acknowledgement that the guarantee is to be used for covering taxes or customs fines.

Companies that fail RFB’s inspection will have their goods seized and be subjected to a fine totalling the value of the imported goods.

Moreover, if the RFB concludes that the true responsible for exporting or importing those goods remained hidden in an attempt to evade taxes, in addition to having the goods seized, the taxpayer may have its tax identification number cancelled and be banned from commercialising items.

The Ruling will enter into force on 23 February 2017.


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Last modified: March 1, 2018