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Modifications to Brazilian Drawback Regime Expected to Benefit Industry

Posted October 08, 2014

Under International Trade Issues

(STR Trade Report)

A recent change to Brazil’s suspension drawback regime is expected to make it easier for companies to take advantage of this cost-saving tool. […]

One of the most important provisions included in the new regulation is a modification to the inventory control of goods under the suspension drawback regime. The Brazilian industry has long called for this change because of different interpretations by Customs in administrative cases. The new rules clarify that companies are not required to physically segregate goods imported or purchased domestically under suspension drawback from identical or equivalent goods of the same kind, quality and quantity imported or purchased domestically under the regular import regime (e.g., a bolt imported under drawback suspension can be stored or mixed with bolts acquired in the local market). This modification is expected to help all companies operating under suspension drawback, although chemical producers who find it particularly difficult to segregate raw materials in their inventory due to the nature of those materials are expected to reap the most benefits. Read more here.