Tax auditors protest delays soybean export payments in Santos

The work of agricultural inspectors in the Port of Santos, Brazil’s central hub for soybean, soy bran, and corn exports, is being impacted by a standard operation spearheaded by Federal Revenue auditors. According to an official from the association Anec, such a protest delays the issuance of phytosanitary certificates necessary to receive soybean export payments.

This situation is developing over a time of peak flow of the soybean crop in Brazil, the world’s largest exporter of the commodity. The Port of Santos, where the problem is most visible, accounts for at least 30% of the national oilseed export and about half of the soybean bran and corn shipped by the country.

The delay in issuing the certificate is not delaying the export of soy and other products, according to Sérgio Mendes, director of the National Association of Cereal Exporters (Anec). Still, it impacts the revenue of companies that export the products, which are generally large multinationals.

“Consider a vessel carrying 65,000 tonnes of soybeans. This cargo is currently worth 42 million dollars. That is the value no longer pocket. With no phytosanitary certificate, no revenue from exports,” said Mendes.

“We are talking about more than a million dollars per vessel. So if a company has more than one ship, it has more to receive (in arrears)… imagine the impact on the company’s cash flow,” he added.

The standard operation of Federal Revenue auditors began at the end of last year, but its impact on bureaucracy only started to have a more severe effect more recently on the grain sector, about two weeks ago, Mendes said.

“Before the operation, there were two to three delay days. Today, the delays can amount to five to six days, with the prospect going even further to ten days. That is when a huge red light started shining brightly,” declared the association director that brings together some of the main global trading companies.

Anec has submitted a letter to the Minister of Economy, Paulo Guedes, hoping that the government will intervene.

According to Mendes, the standard operation should not impact the revenue of trade grain companies whose export operation at the port is fully automated, using conveyor belts.

Regardless, the movement had an impact on grain activities from the moment the inspectors began to interfere in the inspection process of agricultural goods, such as cotton exports from Brazil, which are almost entirely carried out in containers at the Port of Santos, explaining the problem’s centrality in the port of São Paulo.

The delay in approving the cotton loads for export affected the work of agricultural inspectors, explained Mendes, noting that the same officials responsible for inspecting the lint are the ones who issue the phytosanitary certificate for soybeans, corn, and soybean meal.

The trading activity moves tens of thousands of tonnes on a ship, but the companies generally operate with low margins, typical of the commodity business. Thus, any delay in receiving payments affects companies.

“The ability to carry out shipments has not been affected yet; it is the financial side of these companies that has been impacted,” said Mendes.

He also stated that if the phytosanitary certificate has not been issued by the time the cargo arrives at its destination, it may cause unloading problems resulting in paying demurrage fines levied on the vessel’s charterer.

A vessel can set sail before the cargo certificate is issued to guarantee agility, but not without an inspection of agricultural inspectors who sign the phytosanitary document later, after proof of laboratory tests that the product is free from quarantine pests.

According to the president of the Federal Revenue Auditors’ Union (Unafisco), Mauro Silva, the category remains mobilized to have a decree to regularize the category’s efficiency bonus.

Source: Money Times

To read the full original article, please go to:

https://www.moneytimes.com.br/protesto-de-fiscais-atrasa-pagamentos-na-exportacao-de-soja-em-santos-diz-anec/

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