By Joanna Hansford, Contributing Reporter
RIO DE JANEIRO, BRAZIL – The National Confederation of Industry (CNI) published a report last month that showed that up to twenty-six different types of documents can be requested during the lengthy process of exportation in Brazil. Unsurprisingly, this has led to 83 percent of businesses saying they experience problems with exportation.
Further to this, the report shows 79 percent of businesses claim to have not achieved better sales this year due to problems with customs, cargo transportation and bureaucracy.
Companies that deal with high levels of exportation have been found to be the most unsatisfied with the bureaucracy involved. In fact, up to 88.7 percent of companies selling products overseas have claimed that fifty percent of the cost of exportation is due to bureaucracy. Per shipping container, this can reach up to US$2,200.
Exportation from Brazil is widely considered expensive, partly due to the length of time it takes, which on average, currently takes approximately thirteen days. Carlos Abijaodi, Director of Industrial Development at CNI, estimates that if this period was reduced to eight days, the cost of exportation could be reduced by fourteen percent.
The process in Brazil is so complex, that almost all businesses that work with exports find it necessary to contract despachantes (special services) to deal with customs. Only three percent of export companies manage without such help. Problems in the analysis and processing of documents required for export usually cause delays in the inspection and surveying of exports, affecting almost forty percent of companies, according to the CNI research.
However, the Secretary of Exterior Commerce of the organization for the Development, Industry and Exterior Commerce (MDIC) promises improvements. The federal government is attempting to coordinate the organizations that liberate goods at ports, through which ninety percent of Brazilian exports pass.
These improvements have started with an internet portal using a ‘single window’ concept to facilitate Brazilian imports and exports. “The time and cost involved in foreign commerce procedures will be significantly reduced,” said Neri Geller, Political Agriculture Secretary of the Ministry of Agriculture.
“The janela única [single window] needs to be launched as soon as possible by President Dilma Rousseff. It will provide a way to de-bureaucratize Brazil’s overseas commerce,” says José Augusto de Castro, president of the Association of Exterior Commerce of Brazil.
At the moment, machinery, IT, electronics, plastics, vehicles and agriculture are the industries most impacted by high exportation costs and lengthy processing.
The chemical industry is also among those who will see improvements in the exportation process. Denise Naranjo, Director of Exterior Commerce of the Brazilian Chemical Industry Association confirmed that “it [janela única] will level the playing field with foreign commerce.”
Humberto Barbato, of the Brazilian Association of the Electronic Industry, explained that his sector is also strongly affected by the value of the real, which is in turn affected by the dollar, exchange rates and additional taxes. He adds, “[these costs] reduce the competitiveness of Brazilian companies.”
The CNI surveyed 693 industrial companies, and all ports in Brazil. Apart from issues with exportation, inefficient infrastructure and logistics systems, high taxes and exchange rates were cited. While in a report by Grant Thornton on the challenges faced by exporters in 2013, language and cultural barriers were cited as key issues in establishing business relationships with Brazil.