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Brazil’s Bureaucracy Causing Problems for Export Businesses

Posted on the 22 April 2014 by Angelicolaw @AngelicoLaw

According to a report published by the National Confederation of Industry (CNI), the complex and lengthy process required for Brazilian companies to export goods not only substantially increases the cost of exported goods but also limits revenue growth.

In its report, the CNI said that as many as 26 different types of documents may be required during the exportation process. This high level of bureaucracy is the reason why 83% of surveyed businesses claim that they have experienced problems with exportation.

While the process may be lengthy and complex, the bureaucracy also limits growth. The report indicates that 79% of businesses surveyed said that problems with bureaucracy, customs, and cargo transportation are the reasons why they did not achieve higher sales over the past year.

Matters are worse for those companies that export a large number of goods. They are the most dissatisfied with the bureaucracy involved in exportation. As many as 88.7% of companies selling products internationally say that 50% of their cost can be attributed to exportation bureaucracy. When the numbers are calculated, the cost of the problem can reach as high as US$2,200 per shipping container.

On average, it can take as many as 13 days to navigate the export process. That length of time is a major factor contributing to the high costs of exports. The Director of Industrial Development at CNI, Carlos Abijaodi, believes that if the Brazilian government can manage to reduce that time down to just eight days, they would be able to cut the cost of exportation by 14%.

Time is one issue. Complexity is another. Because of the complex nature of the process, 97% of export businesses pay a customs specialist to navigate the red tape. According to the CNI, nearly 40% of businesses report experiencing delays caused by problems with analyzing and processing the required export documents. These problems result in inspection and surveying delays.

The solution may be the Brazilian government’s plan to create an Internet portal to coordinate all of the organizations involved in the export process. This “single window” plan should result in both time and cost savings says Political Agriculture Secretary of the Ministry of Agriculture Neri Geller.

The industries that are most effected by the bureaucracy include electronics, information technology, vehicles and agriculture, machinery, and chemicals. Businesses operating in each of these sectors understandably argue that reducing Brazil’s export bureaucracy will help level the foreign commerce playing field.

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