Due to the huge demand of Brazil's consumer goods market for China's high-quality and low-cost goods, Brazil's market has always been a very attractive and difficult market for China's cross-border e-commerce business since its inception. The difficulties mainly come from two aspects: one is how to collect the money, the other is how to send the goods.
In terms of cross-border financial collection and payment in Latin America, the leading cross-border financial companies in Latin America, represented by ebanx, have put forward many feasible electronic collection schemes as early as 2014, which have helped the cross-border platform leaders such as aliexpress, wish, shopee and sheen, and successfully solved the problem of how to collect money. But for Chinese sellers and platforms, it is not so easy to get the goods delivered. The main obstacles here are Brazil's high tax system and complex import licensing and certification regulatory system. It is a new thing in the past two years that cross-border parcels below US $50 can enter Brazil duty-free. This article will explain to you the origin of this duty-free entry policy and the story behind the development of Brazil's cross-border special line.
The history of Brazil's cross border trade
As early as September 3, 1980, the Ministry of finance of Brazil promulgated the 1804 / 80 decree on simplifying the tax system. Article 2 of the decree stipulates that the imported postal parcels and international air parcels shall be subject to separate tax system, and such parcels shall be exempted from industrial product tax; Article 3 of the act stipulates that postal parcels and international air carrier parcels meeting the following three conditions can be exempted from import tax: a. the purchase price shall not exceed US $500; B. Applicable to individuals or legal persons; C. Goods that the consignee does not intend to resell after entry.
From the perspective of this law alone, in fact, the tax limit on imported parcels is quite loose. After all, the price of cross-border parcels is mostly below $500; The background of the promulgation of this law is that e-commerce was only a concept at that time, and the actual cross-border electronic trading platform has not yet been born in Brazil. Its normative operation regulation is dprf 32 / 1992 and its amendment, which was issued in 1992. This document establishes the rules that will simplify the tax system and apply it to postal parcels and international air parcels. In the next seven years, e-commerce shopping gradually developed in the United States and other western countries. Affected by this, cross-border online shopping began to sprout in Brazil. At that time, cross-border shopping was mainly conducted before the elite who knew English and had international credit cards.
Soon, the government agencies responsible for the entry of cross-border parcels, the Department of Taxation and litigation (sutri) and the customs and International Relations Branch (suari), found that the tax exemption policy of $500 for personal shopping was seriously inconsistent with the high tax system for domestic shopping. Under their promotion, the Brazilian Finance minister issued MF Decree No. 156 / 1999 on June 24, 1999, which was against the second, third and third part of the 1804 / 80 Ministry of Finance decree Article 3 is amended as follows: the maximum amount of international postal parcels is US $50 (or another equivalent currency), and both the sender and the receiver are individuals, which can be settled in the case of exemption from import tax. No. 56 / 11999 reduces the amount of duty-free shopping from $500 to $50, locks the main body of inbound carriers as international postal parcels, and removes the right of international air cargo, i.e. international express cargo, in No. 1804 / 80 to enjoy duty-free entry.
So far, the 1804 / 80 decree of the Ministry of finance of Brazil has determined the legal basis for the tax-free entry of cross-border parcels, and the Ministry of Finance No. 156 / 1999 has further determined the limit conditions for the tax-free entry of cross-border parcels, as well as the subject identities of carriers and consignors. These two regulations have become the basis for Brazilian customs and IRS to enforce the law on the entry of cross-border packages.
Brazil's integration into
the global consumer market in the new century
In September 2014, with wish, aliexpress, Amazon and other platforms opening independent national stations in Brazil, since 2017, Mercado, b2w and other Latin American platforms have successively attracted investment in China, and more and more packages have entered Brazil through postal channels.
In this context, the Ministry of Finance and the General Administration of Customs of Brazil jointly issued the coana regulation No. MF 82 / 2017 on October 18, 2017, which specifies the details of entry operation and law enforcement process of cross-border postal parcels. Mf81 / 2017 "coana regulation" issued on the same day is the operation details and implementation process of international express package entry. The Ministry of Finance and the General Administration of customs have determined the different implementation processes and operation requirements of international postal package and international express cargo entry by means of joint administrative regulations, and made it clear that international express cargo can not enjoy the preferential treatment of $50 duty-free entry. At the same time, TC-6 (international cargo transfer warehouse) and tc-9 (international postal transfer warehouse) have been set up in Sao Paulo International Airport, and the entry customs clearance place and operation site of international postal parcels have been designated to Curitiba, 590 km away from Sao Paulo airport, so as to determine the different operation specifications and procedures of international postal parcels and international express goods.
After the policy and operation details of cross-border postal parcels that can enter Brazil duty-free of US $50 were clear, the number of postal parcels from China to Brazil continued to rise, reaching 207000 tickets / day in December 2017. However, these parcels mainly entered Brazil through the ordinary mail channels of China Post or other countries. On the one hand, the transit time was particularly long (45-60 days), On the other hand, for CORREIOS, the operating cost of surface mail is very low, and the postal settlement price charged according to the UPU rules is very low. Brazil post is in a serious loss in this respect. At that time, e-packet service products with relatively high timeliness and price accounted for less than 20%. In this case, e-commerce platforms, sellers, Brazilian local consumers and CORREIOS of Brazil post were not satisfied with the timeliness and service quality of postal products.
In addition, there was a very important background at that time. Brazil post was a state-owned enterprise with the largest number of employees in Brazil, and its postal work enjoyed high welfare protection. However, because of the losses of more than 10 years, the Brazilian government had a headache. The call for the privatization of CORREIOS of Brazil post became the policy outline of previous governments. Privatization touches the interests of postal workers, who use strikes to express their dissatisfaction, making the process of postal privatization very slow.
For the sake of its own interests, as well as in order to improve the service quality of international postal parcels, speed up the delivery time, and enhance the external image of Brazil post, CORREIOS of Brazil post announced that it will charge international postal operation fee of brl15 / ticket for international postal parcels from August 27, 2018. At that time, all cross-border e-commerce platforms and third-party sellers resisted Brazil's cross-border e-commerce business. The independent station that just started to develop the Brazilian market stopped advertising in Brazil, and the third-party sellers of wish and express also shut down Brazil's Rouxiang delivery. At the same time, Brazilian domestic consumers also expressed dissatisfaction with the operation of Brazil post, and online protests continued. Neighboring industries developed with Brazil's cross-border e-commerce, such as cross-border Finance (collection and payment business), cross-border advertising, cross-border supply chain and source factories in China, are paying close attention to the changes of Brazil's cross-border logistics.
On the basis of complying with Brazil's laws and policies, paying the international postal operation fee of Brazil post, and meeting the duty-free order of less than US $50, we have created a cross-border logistics product that can deliver 95% of the packages within 30 days. We have become Brazil customs national tax, Brazil post, cross-border platforms and sellers, domestic buyers in Brazil, logistics carriers between Brazil and China, and cross-border financial companies Advertising companies and supply chain companies share the same demands and aspirations. At that time, a big man in the cross-border industry said: whoever can handle the cross-border logistics in Brazil will have the cross-border market in Brazil.
Anjunba postal special line
make Brazil reach quickly
In April 2019, Ms. Duan Wei, former head of Alibaba Europe, joined ebanx as executive vice president and President of Asia Pacific region. After a lot of market research, she proposed to ebanx an overall plan to help open up cross-border logistics channels to help Chinese cross-border sellers return to the Brazilian market. Soon Eve, a logistics company invested by ebanx, was established.
In June 2019, ebanx issued an invitation to Anjun logistics to jointly build a cross-border direct mail line from China to Brazil, which was officially put on the agenda. During this period, ebanx and Brazil post reached a cooperation agreement. The core content of the agreement is that Brazil post will open its packet products to the international market through cooperation projects. It breaks through the limitation that packet service can only be used under the framework of UPU.
At the same time, ebanx, together with a number of local logistics carriers and logistics associations in Brazil, paid intensive visits to the Brazilian general administration of customs, the internal revenue service, the commodity inspection bureau and other government departments. After obtaining unanimous support, CORREIOS of Brazil post took the lead in the design of logistics scheme and the data integration and API system docking between the post office system and government departments, At the same time, leve company also started the development and debugging of its own logistics system. Anjun logistics technology department has the honor to participate in and guide the integration of data systems between post office and various departments and units through leve. Therefore, Anjun logistics has won the protection period of one year of exclusive test operation of Pakistan post packet project.
The difficulties encountered by the project after entering the scheme docking stage are far more than what was imagined in the scheme design, mainly focusing on the following problems:
1. The customs questioned the EDI forecast proposed in the plan and thought that there was no way to ensure that the customs declaration data would not be modified after the forecast was completed;
2. The IRS requires that the program must ensure that MF 156 / 1999 decree and mf82 / 2017 coana regulation stipulate that the tax-free consignor and consignee within 50 US dollars must be an individual. At that time, there is no statistical data program on whether the consignee is an individual or not.
3. For a long time, the post office refused to give in to the charging standard of rbl15 / ticket handling charges and the payment of forwarding cargo.
After nine months of difficult negotiation and communication, all parties in line with the original intention of providing preferential international postal products for the market, finally ushered in the product launch test in January 2020. Prior to that, in November 2019, the customs and the IRS issued a decree, requiring all packages entering Brazil to declare the personal tax number (CPF) of the consignee to the customs from January 1, 2020, so as to confirm the main identity of the consignee through the CPF, so as to ensure that the logistics scheme can perfectly meet the requirements of regulations 156 / 1999 and 82 / 2017, The Customs has added the air waybill number information to the EDI forecast information and the relevant restrictions that the flight can only be predicted four hours before departure. The post office has also made concessions on the amount and payment method of international postal operation fee, and agreed to merge all the fees into the freight rate for unified settlement.
Since its launch to today, the packet project of anjunba postal line and Brazil post has been in operation for 17 months. The time limit of product service is 7-14 days for zone 1, 10-18 days for zone 2 and 15-25 days for zone 3 in Brazil. The 30 day delivery rate has remained above 95% for a long time. At the same time, Brazil post has opened the technical interface of track node to Anjun to help us analyze the reasons why the packages can not be delivered properly and the problems in transportation.
Despite the fact that COVID-19 has met COVID-19 shortly after its launch, the product's operational efficiency and high rate of approval have been recognized by customers. China's daily total package of goods in Brazil has reached 520 thousand votes / day, more than double that of 2018.
Postscript: it's a great honor to participate in Brazil's cross-border direct mail line and the key node of cross-border logistics policy transformation. This article records our experience and origin, and our struggle and brilliance in this process. Thank you very much to Anjun logistics Brazil team. They are the most direct force to promote the implementation of postal packet project. They have won the respect of Brazil post, Brazilian consignees and government departments with their professional services. We believe that in the future, there will be more Chinese independent station sellers and platforms entering Brazil, and more Chinese products to meet the needs of Brazilian consumers. All these are the driving forces for us to continue our efforts.
Tony Fang, general manager of Anjun Logistics
