1.0 INITIAL PROCEDURES

1.  Start a company in Brasil to have CNPJ granted (Company’s identification)

2.  Require Customs permit to Import and Export (RADAR)

3.  Check Transfer Price regulation with Law Firm, if operations between sister-companies

4.  Nominate the Customs Broker through a Power of Attorney

2.0 PLACING THE ORDER

1.  Verify deadline of goods in Brasil to decide way of transport

2.  Check Import License requirement prior to shipment by informing Broker correct NCM (Tax Classification) for each item

to be imported

3.0 IMPORT LICENSE

1.  Some itens/NCM (HS Code) require Import License so they can be imported/shipped; we request the approval to official

Agency by presenting the Proforma Invoice and have to wait average 15 to 30 days or even more to get approval. Pls

note that these Agencies can take 60 days or more to check/approve import licenses. By the end, if some information

on final Commercial Invoice is different from the one stated on the Proforma, we can lose the Import License and will

be forced to request a new one. For this reason, it’s very import that information is as accurate as possible, or importer

can have goods held by Customs under extra storage charges and penalties until Import License is finally approved. FYI,

Import License penalty is 30% on CIF value – NO MAXIMUM. Shipping goods without approved import license relays

importer to the maximum risk of not having license granted by Government and loss of merchandise

2.  Import License regulation may change without pre-notice; we recommend NCM is prior to delivery date in order to

check if an Import License or any other special procedure is required

3.  Depending on the purpose / nature of the products, customer and/or product may need to be registered at Brazilian

Health Agency (ANVISA) and/or at Ministery of Agriculture (MAPA) prior to import

3.1. AFTER IMPORT LICENSE APPROVAL (WHEN NCM/HS CODE REQUIRES)

1.  Send shipping instructions to shipper, informing freight forwarder full contact details

2.  Wait for goods readiness confirmation

3.  Inspect documentation issued by shipper

4.  Approve shipment

4.0 AFTER SHIPMENT

1.  Verify if shipping documentation is in conformity with Brazilian Regulations

2.  Prepare Customs Formalities instructions to broker, informing NCM, goods description, origin, acquisition and shipping

data, purchase details (price, Incoterm, quantity) etc. Please see below general SOP.

3.  Provide funds anticipation for import expenses (freight charges, storage, import duties and taxes, trucking, customs

fees, etc)

4.  Provide information on Insurance and Trucking company contact details

5.0 CUSTOMS FORMALITIES

1.  Upon goods arrival, approve Customs Entry filing

2.  Wait for Customs Entry flag

3.  Wait for Customs Clearance

4.  Wait for clearance of complementary Agencies (State, Navy and Agriculture)

5.  Pick up cargo

5.1 CUSTOMS FLAGS

After Customs Entry application on the System, we wait for it’s flag:

?  GRAY flag: import is under goods and documents inspections PLUS market value checking

?  RED flag: import is under goods and documents inspection

?  YELLOW flag: import is under documents inspection

?  WATERMELON flag: import is under documents inspection and muy turn: into red flag or into green flag

?  GREEN flag: goods are cleared, BUT… Customs Officer can re-direct file into another flag

5.2 CUSTOMS PENALTIES

If anything wrong or discrepancy is found on Customs inspections (for instance: weight, NCM, quantity, cntr and seal

number, manufacturer’s data, etc), we are subject to fines as follows:

?  Discrepancy of the commercial invoice: the fines can be from 1% to 10% of the CIF value, with minimum of R$ 500,00

?  Wrong quantity information: the fine is 1% of the CIF value of the item, minimum R$ 500,00

?  Wrong NCM or Description: the fine is 1% of the CIF value of the item, minimum R$ 500,00 plus fine of 30% of the CIF

value of the item

?  Import License approved after shipment: the fine is 30% of the CIF value- minimum R$ 500,00

6.0 GENERAL IMPORT SOP

1. Consignee must be registered at Customs as Importer Company to be the I.O.R. - prior to shipment;

2. We must have P.O.A. from consignee prior to shipment to act on its behalf as Broker at Customs;

3. DDU and DDP terms are no allowed for imports into Brazil;

4. Importing used goods is forbidden by Brazilian Laws and Regulations, under the penalty of being sized by Customs; you

must consult official Entities before purchase;

5. Temporary Import have specific regulation to be followed by Importer prior to shipment;

6. Due to very specific features of import process in Brazil, we strongly recommend no shipment is effected before Importer has assured all formal procedures prior import have been taken.

7.0 DOCUMENTATION

1. Brazilian Customs does not accept photocopies nor proforma of any document; ALL documents for clearance must be ORIGINALLY printed and duly signed with a BLUE PEN, no erasures. SIGNATURE CHOPS are not permitted, and

signature must indicate personell position and name In spite of new regulation permitting importer to collect cargo without presentation of original BL/AWB, under any Customs Flag, Officer may require presentation of original documents. Therefore we recommend that usual routine of

sending original documents to importer is not voided

2. FYI, as per Brazilian Customs Regulation, the commercial invoice must state:

a) Shipper’s full name and address

b) Manufacturer’s full name and address for each imported item; if manufacturer is same as shipper, just inform this

“MANUFACTURER SAME AS SHIPPER”; if not, you must inform manufacturer full data for each imported item

c) Importer’s full name, address and CNPJ

d) Goods full description + Importer’s P/N – only information of Part Number or Codes are not accepted; this description must allow

Customs to identify the goods imported;

e) Marks and Numbers on the cartons (same as on BL or AWB)

f) Quantity and Type/Kind of cartons (wooden box, cartonboard, etc.) - same as on BL or AWB

g) Total gross weight as BL or AWB

h) Total net weight

h1) Individual net weight on packing list (per item)

i) Origin Country: relates to MANUFACTURING (the one where goods were manufactured OR the last one where main manufacturing

occured) – this must be clearly stated on Invoice

j) Acquisition Country: relates to EXPORTER (the one from where goods were purchased) - this must be clearly stated on Invoice

k) Shipping Country: relates do SHIPPING (the one where goods will be shipped from) - this must be clearly stated on Invoice

ATTENTION : China, Hong Kong and Taiwan have different codes at Brazilian Customs System; therefore, shipper must state clear

information on documents and make sure there are not different from marks and numbers on boxes/pieces.

l) Unit Price, total quantity of each item, total price and it’s currency

m) Freight and all charges related to the goods, even though Incoterm is not C+F or CPT; we understand how difficult this is for shippers to get information from shipping agent due to deadlines to be attended. Therefore, we instruct you to declare on Invoice the following sentence : “FREIGHT VALUE AS PER AWB (if by AIR) – BL (if by SEA).

n) Payment Terms

o) Incoterm

3. Cartons data should be exactly the same as stated in commercial invoice and packing list; discrepancies can generate heavy penalties on CIF value

4. Please DO NOT staple our documents on the boxes/cartons: we are only able to get to the boxes at RED or YELLOW flag,and documents are required so we can go to next step, which is Customs Inspection. Which means : if importer does not have original documents to present Customs, he is automatically running into penalty for 5% CIF value, min. R$  500,00 – no maximum

5. Packing List must read packing information : Gross and Net weight per item, quantity and type of packages, marks and numbers and must also be original and signed by shipper/exporter (same as Commercial Invoice)

6. Due to seafreight regulation under SISCARGA, HBLs must read NCM and consignee’s CNPJ, besides Commercial Invoice

general contents (Ex.: Goods description, quantity, marks and numbers and GW of volumes, etc. HBLs must be confirmed to shipping agent as soon as you receive; any revision on BL after MV’s arrival, can generate penalty of USD

5000,00.

8.0 SHIPPER’S RESPONSIBILITY

1. Advise delivery date on Proforma

2. Issue proforma invoice as per below instructions

3. Issue proforma, commercial invoice and packing list in accordance to the Brazilian Customs requirements

- Commercial Invoice must be printed (cannot use a photocopy as original) and duly signed with a BLUE PEN, no

erasures – SIGNATURE CHOPS are not permitted, and signature must indicate personell position and name.

-  It’s very important that final Commercial Invoice states same information of Proforma especially in case of the

imports that requires Import License prior to shipt

4. Fax or e-mail Importer legible commercial invoice and packing list as soon as goods are ready

5. Contact nominated Forwarder to release PO as per schedule

6.  In spite of new regulation permitting importer to collect cargo without presentation of original BL/AWB, under any Customs Flag, Officer may require presentation of original documents. Therefore we recommend that usual routine

of sending original documents to importer is not voided.