EMERENCIANO, BAGGIO e ASSOCIADOS – Advogados

CUSTOMS LAW AND FOREIGN TRADE

Our Law Firm has a team of highly-specialized and experienced lawyers skilled in
performing activities within the scope of Customs Law and Foreign Trade,
providing legal services on International Commerce of Goods, Activities and Legal
Aid before Regulation Agencies, the Brazilian Revenue Service, Administrative
and Legal Courts, among other related services.

With a view to meeting the demands of our clients in full, where the subject matter
complexity requires a multidisciplinary team to act upon, professionals of other
areas are also engaged, such as: taxes, corporations, litigations, agreements, labor
laws, environmental laws and other spheres within our framework.

Let us mention some other activities in this area: Tax and Customs Consulting,
International Customs Law Consulting, Tax and Customs Litigation; Litigation in
Court; Preventive Customs Audit and Special Projects.

Within our scope of work, we would like to highlight:

TEMPORARY ADMISSION

Temporary Admission is a customs system permitting the entrance of certain

goods in the Country, with a specific purpose and for a definite period, upon fully
or partially exempted payment of customs duties accruing on the import thereof,
under a commitment to re-export or otherwise nationalize such goods.

Our law firm assists clients in preparing the loan for use or lease agreements
supporting that system, in addition to monitoring the deadline for returning such
goods; in the event that the importer aims at nationalizing the goods, when such
goods are deemed used, we assist them in obtaining the certificate attesting to the
nonexistence of domestic production.

CUSTOMS AUDIT

Customs Audit is a tool to review the foreign trade procedures put into practice by
the companies, mainly by their internal departments.

This is a highly complex task, which evaluates the tax class structures used, the
licensing, labeling or tagging, any special customs systems, etc.

More to the point, international insurance, international freight and inland freight,
engagement of freight forwarders and all the logistics involved in international
operations are evaluated as well.

Brazil: São Paulo – Campinas – Rio de Janeiro – Salvador – Recife – Brasília – Porto Alegre
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Such evaluation will seek solutions for cost-effectiveness regarding taxes, customs
fees and other expenses accruing on the transaction.

Nevertheless, a liability may be ascertained, which may be adjusted under a

voluntary tax disclosure, such as in case of incorrect tax classification.

Many times, importers and exporters rely on informal instructions passed on by

freight forwarders and the very revenue service, without figuring out the liability
they are giving rise to.

FRAUDULENT INTERPOSITION BY THIRD PARTIES

As a result of the new Customs Regulation, and the improved resources of the
Revenue Service intelligence, many importers are experiencing a provisional
withholding of their goods, for as long as any suspected irregularity is
outstanding, including under penalty of loss.

Time and again, there is a suspected concealment of the actual purchaser of the
goods, e.g., a suspected counterfeit of data in shipping documents, or fallacious
information.

A withholding may last up to one hundred and eighty (180) days, to culminate, as
a general rule, in the application of the penalty of loss, without prejudice to the
filing of a tax claim for penal purposes.

Our law firm operates from the beginning of the inspection procedure, assisting in
objecting the relevant notices, and also, where required, in preparing an
administrative objection to any such penalty of loss as applied.

If necessary, we shall operate in the legal channels in the sense of seeking to render
the penalty or the inspection procedure null and void, in addition to filing a claim
for releasing such goods as withheld.

Our criminal department, in its turn, shall assist the client in the event that the tax
claim for penal purposes is advanced.

IMPORT OF USED GOODS

The import of used goods in Brazil is permitted only in case of nonexistence of

domestic production.

Brazil: São Paulo – Campinas – Rio de Janeiro – Salvador – Recife – Brasília – Porto Alegre
Law Firms Abroad*: Germany – Austria – Belgium – Denmark – Spain – France – Greece – Holland – India – Italy – Mexico
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 EMERENCIANO, BAGGIO e ASSOCIADOS – Advogados

Nowadays, submitting a certificate attesting to the nonexistence of domestic

production is not required, because it is vested in Brazilian Foreign Trade
Department (―DECEX‖) to search its own website.

However, not every domestic company claiming to be a manufacturer of certain

goods is indeed so, which causes a groundless hindrance to the aimed import of
the used good.

Our law firm assists those importers to remove such obstacles, voucher [sic], in
cooperation with our Mechanical Engineers, so as to evince the nonexistence of
domestic production, thus helping the importer to obtain the proper import
license.

TAX CLASSIFICATION

Tax classification of goods is a controversial matter.

Frequently, the importer of a given good is not clearly aware of the tax
classification of the good it aims at importing or uses to import on a regular basis.

Emerenciano, Baggio e Associados — Advogados prepares the tax classification

research procedure in its entirety, based on report by a tax classification expert,
and follows up the procedure until the research is completed.

In the event that the research result is negative, we shall make the relevant
voluntary tax disclosure within the statutory deadline, in order to remove any
administrative and/or pecuniary penalties.

Which makes us unique is the high quality we use to work up a claim and follow it
up on a continuous basis, never to ignore results of researches already existing in
different tax regions.

We have tax classification experts to do so.

VOLUNTARY TAX DISCLOSURE

A voluntary tax disclosure is an instrument to admit a given infringement

regarding a former customs clearance.

It may supplement the tax classification research procedure and/or the internal
audit work.

The point is that, by means of a voluntary tax disclosure, the application of some
penalties may be avoided, such as fines due to incorrect classification.

Brazil: São Paulo – Campinas – Rio de Janeiro – Salvador – Recife – Brasília – Porto Alegre
Law Firms Abroad*: Germany – Austria – Belgium – Denmark – Spain – France – Greece – Holland – India – Italy – Mexico
Poland – Portugal – United Kingdom – Switzerland (*Lawrope)
 EMERENCIANO, BAGGIO e ASSOCIADOS – Advogados

However, it is necessary to evaluate, as in the case of a tax classification research,

whether the voluntary disclosure is based on an accurate understanding of the tax
classification under confession.

This is a work to count on tax classification experts, always.

As a supporting work, our law firm prepares applications for rectification of

import statements en bloc, pursuant to the applicable law in force.

CUSTOMS ASSISTANCE IN TAX AND LEGAL PROCEEDINGS

(LITIGATION AND PREVENTIVE PROCEDURES)

Customs Law is complex and controversial, highly based, primarily, on

government normative acts (Normative Instructions, Ordinances, Service Orders,
Resolutions, etc.).

Accordingly, an accurate understanding of the law and the juridical posture of the
finance and customs authorities is of the essence for those who want to operate in
Foreign Trade.

The work of our law firm encompasses operating in almost all tax and legal
proceedings involving Customs Law and Foreign Trade.

Currently, nothing is more common, for importers of any goods whatsoever, than
being notified by the Brazilian Revenue Service.

Such notices may take place in the course of forwarding or with a view to customs
appraisal.

In many cases, importers are punished with the irrevocable loss of their goods.

There are a number of reasons: incorrect tax classification, lack of license,

concealment of actual purchaser, failure to meet deadlines in special customs
systems, etc.

Our law firm is highly qualified to prepare objections to tax assessment notices,
until a final decision, in compliance with such methodology as imposed by the Tax
Administrative Procedure regulations, as well as to prepare any legal claims on the
said issues.

Depending on the subject matter of the tax assessment notice, we have a technical
team to help us (Chemical Engineers, Mechanical Engineers, etc.).

Brazil: São Paulo – Campinas – Rio de Janeiro – Salvador – Recife – Brasília – Porto Alegre
Law Firms Abroad*: Germany – Austria – Belgium – Denmark – Spain – France – Greece – Holland – India – Italy – Mexico
Poland – Portugal – United Kingdom – Switzerland (*Lawrope)
 EMERENCIANO, BAGGIO e ASSOCIADOS – Advogados

EX-TARIFF

Many times, the heavy tax burden accruing on the import of capital assets,
information technology goods and telecommunication goods is the great hindrance
preventing companies from expanding.

Investing in manufacturing plants requires the importers to think of options to

reduce tariffs, a framework that encompasses the temporary reduction of import
taxes, referred to as "ex-tariff".

When there is no domestic production of the good aimed at being imported, the
import tax rate is reduced – from 14% to 2% –, which translates into an overall
saving of 15% considering the whole process of import.

For instance: a product priced at US$ 500,000.00, if benefiting from such tax
reduction, would be cleared at a tax saving of R$ 140,000.00 (applying an R$ 1.86 /
US$ 1.00 exchange rate).

However, succeeding in obtaining such reduction is subject to the issue of a

certificate attesting to the nonexistence of domestic production.

More often than not, fictitious domestic manufacturers raise difficulties to

obtaining the said certificate.

Our law firm distinguishes from a number of consulting offices and freight
forwarders in view of the battle we fight against fictitious manufacturers of
domestic products, with a view to finally evincing the nonexistence of domestic
production before the Ministry of Development, Industry and Trade.

Partner in charge
Adelmo da Silva Emerenciano
adelmo@emerenciano.com.br
Phone 55 11 2123 4500
Fax 55 11 2123 4599

Associate Associate
Felippe Alexandre Ramos Breda Rogério Zarattini Chebabi
felippe.breda@emerenciano.com.br rogerio.chebabi@emerenciano.com.br
Phone 55 11 2123 4500 Phone 55 11 2123 4500
Fax 55 11 2123 4599 Fax 55 11 2123 4599

Brazil: São Paulo – Campinas – Rio de Janeiro – Salvador – Recife – Brasília – Porto Alegre
Law Firms Abroad*: Germany – Austria – Belgium – Denmark – Spain – France – Greece – Holland – India – Italy – Mexico
Poland – Portugal – United Kingdom – Switzerland (*Lawrope)