The “awakening” of Customs Law in Brazil

1. Brazilian Customs Law in the times of (old) protectionism

More than two decades before Achille Cutrera published his “Principle of Diritto and Doganale Politics”, and almost fifty years before Pedro Gual Villalbí wrote his “Theory and Technique of Customs Policy and Trade Treaties”, a distinguished Brazilian jurist, Augusto Olympio Viveiros de Castro, later appointed to the Supreme Court (where he was a minister from 1915 to 1927), had already published works dealing with customs issues: “Or Smuggling”, in 1899; and “Treaty of Imposts – theoretical and practical study”, in 1901^[1].

Also fifteen years before the Argentine Customs Code was published, Brazil already had in force Decree-Law 37 of 1966, which reorganized the structure of the customs system, establishing, in its 178 articles, legal provisions on customs jurisdiction, customs clearance, customs regimes, taxes incident to foreign trade operations, customs infractions and penalties, and customs litigation.

Brazil was also one of the first countries to establish a Tax Court (“Taxpayers’ Councils”), in September 1924, which began its work on September 14, 1925, in Rio de Janeiro (then the seat of the federal government), and was given customs powers by a “Superior Tariff Council” in 1934.^[2]

However, at this point the advantages that Brazil seemed to have, internationally, and more specifically, in relation to its South American neighbors, in customs matters, come to an end. Decree-Law 37/1966, which was drafted by a specialized technical team, developed its work at the same time as another team was drafting Law 5.172/1966, which aimed to consolidate tax legislation, which had just been amended in the 1964 Constitution (by Constitutional Amendment 18/1965).

Gerson Augusto da Silva, one of the main specialists in customs matters in Brazil, in those times of classical protectionism (tariffs), and one of the fathers of the “ALALC”, was a member of the drafting committee of Law 5.172/1966, which became known as the “National Tax Code”, and coordinator of the group that drafted Decree-Law 37/1966, which was never known as the “Customs Code”, as desired by item 15 of its explanatory statement: “Following the example of modern customs codes, the project deals only with matters of a substantive nature, leaving all procedural issues to the regulations, so that the working methods and systems, which are increasingly required to be simplified today, are always kept up to date” (free translation).^[3]

While tariffs had a leading role on the international stage (let us not forget that in some countries they still do), customs studies ended up being limited to tax issues, which was even reflected in the organisation of Customs, which ceased to be autonomous in relation to internal taxation in 1968, with the creation of the “Secretaria da Receita Federal (SRF)”.

In Brazil, Customs were invisible in the main ranks of the SRF structure until 1985, when a General Coordination in charge of customs issues (COANA) was created under the SRF structure. And the customs dispute regarding fines and taxes was subordinated to the tax administrative process, provided for in Decree 70.235/1972.

The bibliographic production on customs matters, in that period, in Brazilian lands, was basically concerned with tax issues (with studies developed by Ruy de Melo and Raul Reis, Américo Masset Lacombe, Hamilton Dias de Souza and Sebastião de Oliveira Lima), with the exception of rare authors dedicated to purely customs issues (José Lence Carluci and Roosevelt Baldomir Sosa).^[4]

Thus, while Argentina, Paraguay and Uruguay (which would join Brazil in 1991 to establish MERCOSUR), as well as the European Community, consolidated their customs codifications in the 80s and 90s, Brazil only managed to establish a regulation of the already outdated Decree-Law 37/1966, by Decree 91.030/1985.

2. Brazil and the new air: the internationalization of Customs Law

With the Uruguay Round of Multilateral Trade Negotiations, which created the "World Trade Organization" (WTO) and internationally regulated issues such as customs valuation, origin, trade defense, import licensing, and other issues related to the "new protectionism" (non-tariff), and with the increase in the scope of the Customs Cooperation Council, which was already dedicated to important customs issues, such as tariff classification, and which began to adopt the name of "World Customs Organization" (WCO), the scenario becomes one of flagrant internationalization of customs regulations, with a decrease in unilateral national possibilities for conducting foreign trade policy.

As a member of the WTO (and, even before the WTO, as a founding State of GATT/1947), and as a member of the WCO since 1981, Brazil began to incorporate into its legislation and work philosophy the issues arising from international customs treaties, which generated the first national norms on rights. antidumping and compensatory (Law 9.019/1995), the improvement of customs valuation tools, the establishment of selectivity, based on risk management, with conference channels (which was initially achieved in MERCOSUR, by Decision CMC 16/1994), and the clear perception that Customs was no longer limited to tax issues. When we wrote in 2005, on "Customs Law of integration in MERCOSUR",^[5] and, in 2006, on “The influence and application of international treaties on customs issues”,^[6] In Brazil, there were already regulations with express reference to customs legislation (for example, Law 10.833/2003, which, in its Chapter III, articles 59 to 81, deals with “provisions relating to customs legislation”, after dealing in the previous chapter with provisions “relating to tax legislation”). The distinctive signs between the tax and customs universe, with the expansion of the role of Customs, and the reduction in the importance of tariffs, were beginning to appear.

That was not enough, however, to prevent good customs works such as the “Special Customs Regimes”, ^[7] by Liziane Angelotti Meira, in 2002, were catalogued in the Collections of Tax Studies. In 2008, on the occasion of the publication of “Customs Law and Tax Law – Basic Distinctions”, ^[8] We verified that Brazilian jurisprudence and doctrine already used the terminology “Customs Law”, although without substantial uniformity.

Trade liberalisation at the beginning of the century was only further accentuated by September 11, 2001, which temporarily halted the facilitating drive in the name of security. This impact of the attack on the Twin Towers on international customs legislation was felt in the “SAFE Framework of Standards to secure and facilitate global trade” (2005), of the WCO, known as “The SAFE Framework”, which seeks balance between trade facilitation and security measures.

In 2008, the document “Customs in the 21^st Century: Enhancing Growth and Development through Trade Facilitation and Border Security”, also produced by the WCO, goes on to discuss the role of Customs in the face of the new international scenario, proposing, as a global mission for Customs “to develop and implement a set of integrated policies and procedures that guarantee greater security, as well as the effective facilitation of trade and the entry of income”.

Thus, while not forgetting the tax collection function (still present and important in a large part of the WCO members), it indicates the path of trade facilitation, coordinated with the search for security, all those elements present in the definition of "customs control".

This new international reality became present in the Brazilian Customs Regulations of 2002 (Decree 4.543) and 2009 (Decree 6.759 – current regulation), obviously with the limitations that a simple decree of the Executive Branch provides to deal with the issue.

In the Academy, at the end of the first decade of the 21st century, two hands were enough to count the number of specialized works in Brazil, which contrasted with the rich bibliography already produced in Argentina (among others, by Ricardo Xavier Basaldúa, Enrique Barreira, Hector G. Vidal Albarracín, Daniel Zolezzi and Juan Patrício Cotter), Mexico (for example, by Máximo Carvajal Contreras and Andrés Rohde Ponce), in Colombia (vg, by Germán Pardo Carrero), and in Spain (vg, by Francisco Pelecha Zozaya and by Santiago Ibáñez Marsilla), for illustrative purposes only.

In the following years, two international treaties would begin a new stage in the history of international trade, with a direct impact on Brazil and its neighbors: the Revised Kyoto Convention of the WCO and the Trade Facilitation Agreement of the WTO.

3. Brazil and the latest trends: trade facilitation

After the end of the Uruguay Round, almost all tariff and non-tariff obstacles to free trade were regulated. In 1996, attention turned to the issue of trade facilitation, understood as the elimination of duplicate and/or unnecessary controls, the reduction of bureaucracy, and the streamlining of logistics and customs procedures, with intensive use of technology and risk management tools.

The WCO, then, had the vision of, in that scenario, reviewing the Kyoto Convention of 1973, which had a low level of adherence, seeking to adapt its text to new technologies, to risk management, to the philosophy of authorized operators, to the speed of release with the possibility of audits. a posteriori, resulting in the text of the Revised Kyoto Convention (RKC – Convention on the Simplification and Harmonization of Customs Procedures).

The WTO/RCT, in force since 3 February 2006, even before it became widely accepted by the international community (which is undeniable today, with its 136 contracting parties) as a set of international customs best practices, was the main source for drafting the most important WTO agreement in the Doha Round: the Trade Facilitation Agreement (TFA).

With a new negotiating technique that took into account the different levels of development of the members (starting from categories “A”, “B” and “C”), the WTO succeeded in Bali in placing the main customs issues (70% of them already dealt with in the CK/WCO) under the jurisdiction of the Dispute Settlement Mechanism (then more operational) of the WTO, with the TFA/WTO entering into international force on February 22, 2017 (with exceptions for the provisions classified as categories “B” and “C”).

Brazil deposited its instrument of ratification of the WTO/TFA on April 20, 2016, and published the Portuguese text of the agreement in Promulgation Decree No. 9.326/2018. The only provisions notified by Brazil in 2014 as a category other than “A” (Articles 3.6, “b”; 3.9, “a”, i; 7.1; 7.7.3; and 11.9) were reduced to the last three in a new notification in 2017, with a final compliance date of December 31, 2019. Therefore, the WTO/TFA is, today, fully in force for Brazil. ^[9]

As regards the WCO/CK, Brazil deposited its instrument of ratification on 5 September 2019, and published the Portuguese text of the convention in the promulgation decree n. 10.276/2020. Brazil's accession to the WCO/CK covers the text of the Body and the General Annex (mandatory), and the following chapters of Specific Annexes: A, 1 (Customs formalities prior to the presentation of the goods declaration); B, 1 (Importation for consumption); C, 1 (Exportation on a definitive basis); D, 1 (Customs warehouses); and J, 1 (Travelers), all without reservations.

The WCO/CKR entered into force for Brazil in December 2019 (in accordance with art. 18.2 of the Body of the Convention). However, according to art. 13 of the same Body, the effective implementation of the WCO/CKR has a “grace period” of 36 months for standards (and accepted recommended practices), and 60 months for transitional standards, with a request for extension being permitted (art. 13.4). Brazil submitted such a request to the WCO/CKR Management Committee for the standards of Chapter 10 of the General Annex (“Remedies in Customs Matters”), with the final implementation date for these standards being December 2023. ^[10]

The extension was requested because Law 14.651, which was published on 24/08/2023, was still in the legislative process, establishing the possibility of appeals to two administrative instances in case of confiscation.

It is true that the new global trend towards trade facilitation produced direct effects on Brazilian customs legislation, which began to provide for the possibility of early registration of merchandise declarations, differentiated and favored treatment for authorized economic operators, rules of compliance and confidentiality, more effective risk management mechanisms, with advance information, measurement of release times (with the OMA tool – “Time Release Study”), and strengthening of audits to rear.

It was no different in the other MERCOSUR members, all of which will adhere to the TFA/WTO, and almost all (except Paraguay and Uruguay) to the CKR/WCO. In practice, the regulatory changes described in the previous paragraph occur in all MERCOSUR countries, regardless of their adherence to the aforementioned treaties.

However, for Brazil this phenomenon is added to another, of growing interest in the customs issue, academically, and in normative and jurisdictional terms, in the last ten years.

4. Brazil: Current times and the awakening for Customs Law

In 2015, we discussed the internationalization of Customs Law (in “Customs Direito: once and for all internationalization”), highlighting the importance of this issue for the future of the country’s foreign trade. ^[11]

In the following years, the number of publications on customs issues was impressive, several of them discussing Brazil’s adaptation to the aforementioned international treaties. Mention should be made, just as an example, of some individual books published after 2015 dealing with various topics of Customs Law (“Import Tax and International Customs Law” – 2017; “Introduction to Customs Law” – 2018; “Customs Law”/v.1 and v.2 – 2019); “Customs Law Course: Jurisdiction and Taxes in Kind” – 2021; “Customs Law Course”/2nd ed. –“2022; “Customs and International Trade Legislation”/8th ed. – 2022; “Customs Offenses in Light of International Customs Law” – 2024). ^[12]

In addition to these, without claiming to be exhaustive, there are organized collective books containing approximately two hundred articles on recently published customs issues ("Tax and Customs Studies" of the III, IV and V Carf Seminar - 2018, 2019 and 2020; "Relevant Topics in Customs Law" - 2020; "Constitution, Taxation and Customs in Maritime Transport and Port Activity" - 2021; "Current Issues in Customs Law III" - 2022; "Current Controversies in Customs Law: tribute to the teacher Roosevelt Baldomir Sosa" - 2022; "Customs Law and Customs Tax Law" - 2022; "Essays on Customs Law II" - 2023; "Customs Territory" - 2023; and "Customs Law" - 2023). Customs and Foreign Trade Taxation”- XNUMX. ^[13]

For those who say that there is no customs bibliography in Brazil, it can now be said with certainty, in this scenario, that there are more than three hundred scientific texts on Customs Law in Brazil available to researchers interested in delving deeper into the subject.

Brazilian academia is already beginning to devote itself to scientific research on Customs Law, with groups formed for that purpose at least at the Catholic University of Brasilia (UCB), at the Getúlio Vargas Foundation in São Paulo (FGV) and at the Federal University of Minas Gerais (UFMG). There are already dissertations and theses defended on the subject of customs. And I had the honor of teaching the first Customs Law course in a master's degree, in Brazil, at the UCB.

The scientific production of this academic environment and the growing interest in the subject, already present in various postgraduate and extension courses, are beginning to produce their consequences in the normative and jurisprudential environment. And why not say, also, in the economic environment, taking into account that, paradoxically, despite Brazil being among the ten main economies in the world, it is not even among the twenty countries that participate the most in international trade.

The Judiciary is now speaking out on customs issues more frequently, and in line with international treaties (it is true, many times “in line” even without express mention of said treaties in the decisions), as recorded in matters related to customs value (RE 559.9374/RS and REsp 1.799.306/RS, binding), retention of goods by Customs (RE 1.090.5914/SC, binding), and audits. a posteriori (REsp 1.576.199/SC and REsp 1.826.124/SC). ^[14]

The Brazilian administrative court (Administrative Council of Fiscal Appeals – CARF) also highlighted the growing importance of customs issues in recent binding statements (“Sumulas”) approved in 2018 (statement no. 126, regarding the provision of information to Customs), 2019 (statements no. 155, 156, 160 and 161, referring to distinctions between customs and tax institutions) and 2021 (statements no. 184, 185, 186 and 187, also establishing differentiations between tax and customs institutions, and dealing with customs penalties).

The CARF itself, in its brand new Internal Regulations, approved by Ordinance MF 1.634/2023, in force since January 5, 2024, established the possibility of creating specialized chambers, a possibility that was realized this week, on April 18, 2024, with the creation of a Chamber with two specialized chambers in customs matters, in the CARF. The news was announced on March 21, 2024, at the Monthly Conference of the Ibero-American Association of Tax or Administrative Courts of Justice (AITFA). ^[15]

Specialized administrative judgment in customs matters is perfectly compatible with the evolution of the subject, described in this text, and will guarantee greater quality and technicality in the analysis of issues that, in general, have little relation to Tax Law (a subject of specialization of a large part of the administrative judges/advisers that make up the other classes). ^[16]

As far as we can see, several factors point to a real "awakening" of Customs Law in Brazil, in the Academy, in administrative and judicial courts, with emphasis on international treaties, in a virtuous circle that tends to generate more and more scientific productions, building the foundations for future studies aimed at confirming or rejecting the previous ones, in the eternal mechanism of construction of scientific knowledge.

5. Final considerations: perspectives for Customs Law in Brazil

In the environment described in the previous item, it is clear that the process of maturing Customs Law in Brazil has taken a leap forward. This does not mean, however, that the construction is ready to allow its visualization in a system.

The process of systematizing legislation still needs to be carried out, with the updating of the Customs Regulations (at least in accordance with subsequent legal norms and the TFA/WTO and the CKR/WCO), and the long-awaited preparation of a Customs Codification.

Of the customs codifications mentioned in the initial item of this text, only Argentina's remains in force (although substantially modified). Paraguay (in 2004), Uruguay (in 2014) and the European Union (in 2013) established new Customs Codes, adapted to the current reality of international trade.

Given the substantial development of the customs issue in recent years, the time has come for Brazil to modernize its legal customs regulations into a system compatible with the role of modern Customs and with international treaties, without forgetting the specific characteristics of the country, its size and its Federal Constitution.

Some evolution is already beginning to be perceived in this regard, with a demand for a Brazilian Customs Codification, by various sectors of society, mainly in light of the recently presented Consolidation Bill 508/2024, which, despite being far from solving the issue, highlights the debate on the subject. ^[17]

Therefore, what is expected, as a consequence of the “awakening” and the recent development of Customs Law, is the continuation of the virtuous circle, increasing Brazilian participation in international trade, based on legislation as modern as is expected of a true Customs of the 21st Century.

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Highlighted

[1] The work “El Contrabando” is available at:  https://www2.senado.leg.br/bdsf/handle/id/518692We already had the opportunity to present its synthesis in: https://www.youtube.com/watch?v=dv6_gfHfBms&t=17s.

[2] On the history of CARF, see: MARTINS, Ana Luisa. Fiscal Resources Administrative Council: 85 years of impartiality in the solution of fiscal litigation. Rio de Janeiro: Capivara, 2010.

[3] About Gerson Augusto da Silva, see: SILVA, Gerson Augusto da. Customs Studies (in memoriam). Brasilia: ESAF. 1983. 

[4] MELO, Ruy de; REIS, Raul. Import tax manual and related exchange regime. São Paulo: RT, 1970; LACOMBE, Americo Masset. Import tax. São Paulo: RT, 1979; SOUZA, Hamilton Days of. Import tax structure in the national tax code. São Paulo: Tax Report, 1980; and LIMA, Sebastião de Oliveira. The import tax manager in Brazilian legislation. São Paulo: Resenha Tributária, 1981. About Roosevelt Baldomir Sosa and his work (nove books), see: TREVISAN, Rosaldo. The Customs and Tributary of Roosevelt Baldomir Sosa. In: SARTORI, Angela; et al. (coord.). Controvérsias Atuais do Direito Aduaneiro – Tribute to Mestre Roosevelt Baldomir Sosa. São Paulo: Customs, 2022.

[5] TREVISAN, Rosaldo. Customs clearance for Mercosul integration. In: MENEZES, Wagner (Coord.). International law studies. Curitiba: Juruá, 2005. v. 5. p. 382-403.

[6] TREVISAN, Rosaldo. The influence of the application of two international treaties on customs issues. In: MENEZES, Wagner (Coord.). International law studies. Curitiba: Juruá, 2006. v. 8. p. 318-329.

[7] MEIRA, Liziane Angelotti. Special Customs Regimes. São Paulo: IOB, 2002.

[8] TREVISAN, Rosaldo. Customs and tax law – Basic distinctions. In: TREVISAN, Rosaldo (Org.). Current customs law issues. São Paulo: LEX, 2008. p. 11-55.

[9] About the CKR/OMA, in Brazil, see: MORINI, Cristiano. The Revised Quioto Convention and Modernization of Customs Administration. In: TREVISAN, Rosaldo (org.). Subjects Atuais de Direito Aduaneiro II. São Paulo: Lex, 2015, p. 163-198.

[10] On the TFA/WTO, in Brazil, see: TREVISAN, Rosaldo. The Agreement on the Facilitation of Trade and its Impact on the Brazilian Customs Legislation. In: CASTRO JUNIOR, Osvaldo Agripino de (Org.). Constitution, Taxation and Customs in Maritime Transport and Port Activities. 1st ed. Belo Horizonte: Forum, 2020, v. I, p. 37-67; e FERNANDES, Rodrigo Mineiro. The implementation of the Agreement on Commercial Facilitation in Brazil. In: TREVISAN, Rosaldo (org.). Subjects Atuais de Direito Aduaneiro III. São Paulo: Customs, 2022, p. 431-468.

[11] TREVISAN, Rosaldo. Customs clearance in Brazil: now and then there is internationalization. In: TREVISAN, Rosaldo (Org.). Current customs law issues II. São Paulo: LEX, 2015. p. 11-60.

[12] TREVISAN, Rosaldo. The import tax by the International Customs Directorate. São Paulo: LEX, 2017; FERNANDES, Rodrigo Mineiro. Introduction to Customs Administration. São Paulo: Intellect, 2018; BRUYN JUNIOR, Herbert Cornélio Pieter de. Customs Direito (v.1): police power and customs regimes; is Customs Direito (v.2): loss penalty. Curitiba: Juruá, 2019; ANDRADE, Thális. Customs Administration Course: Jurisdição e Tributos em Espécie. Belo Horizonte: Dialetica, 2021; SEHN, Solon. Customs Law Course. 2nd ed. Rio de Janeiro: Forensic, 2022; e CAPARROZ, Roberto. International Trade and Customs Legislation. Schematic Collection. 8th ed. São Paulo: Saraiva, 2022; FAZOLO, Diogo Bianchi. Customs Infrações in light of the International Customs Direito. São Paulo: Caput Libris/NSM, 2024.

[13] GOMES, Marcus Lívio; OLIVEIRA, Francisco Marconi (coord.). Tax and Customs Studies of the III CARF Seminar. Brasilia: CNC, 2018; GOMES, Marcus Lívio; OLIVEIRA, Francisco Marconi (coord.). Tax and Customs Studies of the IV CARF Seminar. Brasilia: CARF, 2019; GOMES, Marcus Lívio; OLIVEIRA, Francisco Marconi; PINTO, Alexandre Evaristo (coord.). Tax and Customs Studies of the 5th CARF Seminar. Brasilia: CARF, 2020; SARTORI, Ângela; BARBIERI, Luís Eduardo G.; MOREIRA JUNIOR; Gilberto de Castro (coordinator). Relevant Customs Direito Issues. São Paulo: Customs, 2020; CASTRO JUNIOR, Osvaldo Agripino de (org.). Constitution, Taxation and Customs in Maritime Transport and Port Activities. Belo Horizonte: Forum, 2020; TREVISAN, Rosaldo (org.). Subjects Atuais de Direito Aduaneiro III. São Paulo: Customs, 2022; SARTORI, Ângela; TESSER, Daniel Bettamio; GUIMARÃES, Thaís (org.). Controvérsias Atuais do Direito Aduaneiro: Tribute to Mestre Roosevelt Baldomir Sosa. São Paulo: Customs, 2022; BATISTA JUNIOR. Onofre Alves; e SILVA, Paulo Roberto Coimbra (coord.). Customs Direito and Customs Tributary Direito. Belo Horizonte: Letramento/Casa do Direito, 2022; PEREIRA, Cláudio Augusto Gonçalves; REIS, Raquel Segalla (Org.). Customs Direito Tests II. São Paulo: Tirant lo Blanch, 2023; e KOTZIAS, Fernanda; PIERI, Fernando: BRANCO, Leonardo; MEIRA, Liziane; e TREVISAN, Rosaldo. Customs Territory. vol. I. São Paulo: Amanuense, 2023; PEIXOTO, Marcelo Magalhães; SEHN, Solon. (Coord.). Customs and Tax Administration of Foreign Trade. São Paulo: MP, 2023.

[14] On the decisions of the judicial courts, see: TREVISAN, Rosaldo; MEIRA, Liziane Angelotti. An international customs report on recent decisions of Superior Courts in Brazil. In: PEREIRA, Cláudio Augusto Gonçalves; REIS, Raquel Segalla (Org.). Customs Direito Tests II. São Paulo: Tirant lo Blanch, 2023, p. 63-89.

[15] News also available in: TREVISAN, Rosaldo; MEIRA, Liziane Angelotti. CARF customs specialization is pending. CONJUR Electronic Magazine, March 26, 2024, available at: https://www.conjur.com.br/2024-mar-26/a-especializacao-aduaneira-no-carf-esta-chegando/.

[16] On the advantages of specialized jurisdiction in customs matters, see: BASALDÚA, Ricardo Xavier. Importance of the Specialized Jurisdiction in Customs Matters: Situation in Argentina”. In: TREVISAN, Rosaldo (org.). Current issues of Direito Aduaneiro II. São Paulo: Lex, 2015, p. 61-86.

[17] Draft Law available at: https://www25.senado.leg.br/web/atividade/materias/-/materia/162274.