Rules for operating agreements between Brazil...
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In an extraordinary plenary session held on 3 September 2019 in Brasilia, the Administrative Council of Tax Appeals, known by the acronym CARF (Conselho Administrativo de Recursos Fiscais) met to deliberate on several drafts of proposals for binding precedents to resolve, in one go, pending tax appeals.
One of the fifty drafts of precedents considered by CARF’s counsellors (49th Proposal for Binding Precedent) had the following enunciation, in English translation:
“The cargo agent and the shipping agent, in the condition of representatives in the country for a foreign carrier, are liable for the infractions committed in the carriage of goods”.
In practical terms, the draft aimed at resolving two situations involving agents acting for foreign sea carriers:
- Penalties imposed by the Customs authorities owing to failure to comply with the cargo reporting requirements on the SISCOMEX CARGA (SISCARGA) system; and
- Customs duties and penalties owing to shortage of or damage to imported goods which would otherwise be payable by the importer had the cargo been delivered in good order and condition
Many law offices acting for individual companies or unions of shipping agents as well as the Brazilian Bar Association contributed with submissions which eventually led to CARF rejecting the proposed draft in favour of the agents.
With this decision, we expect that a large number of cases sitting at CARF after as many as eight to ten years, where shipping agents have been held liable for carrier’s faults, will finally be heard and dismissed. Many of these outstanding cases were reported by the agents to their principals who were on close follow-up either directly or through their P&I Clubs.
This judgment reinforces a decision already taken by the Federal Attorney General’s Office on its Abridgment n° 50 which rules that “The shipping agent shall not be held liable for sanitary or administrative infractions committed aboard vessels”, in free translation.
