Main reasons for fines imposed in foreign trade

Main reasons for fines imposed on exporting and importing companies 

The complexity of import and export operations requires meticulous attention to detail and strict compliance with the regulations in force. Any mistake, no matter how small, can result in significant fines and other losses for foreign trade companies.  

In this article, we will explore the main reasons why companies face penalties in the context of foreign trade and provide essential tips on how to avoid them. 

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Main reasons for import and export fines

Imports are one of the areas most susceptible to fines, requiring companies to maintain a well-structured compliance system to minimize risks.

Many of these fines are due to errors in the information presented in the documents related to operations.

Here are some of the main causes of fines!

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Inaccurate or omitted information on shipping documents

Errors or omissions in shipping documents can lead to substantial penalties. It is therefore crucial to ensure that all information is complete and accurate. 

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Use of falsehood to obtain tax benefits

Any attempt to deceive the tax authorities in order to obtain tax benefits is strictly punished and results in heavy fines. 

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Omission of information

Failure to provide necessary information in documents can result in significant penalties. 

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Defiance of the customs authority and obstruction of inspection

Any attempt to hinder the customs authorities or disrespect them can result in fines and penalties. 

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Error when issuing an export invoice

Errors in issuing the export invoice can lead to serious problems and result in fines. 

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Error in the statistical unit of measurement

Using the wrong statistical unit of measurement is a mistake that can result in fines. 

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List of penalties

The IRS provides a table of common penalties, each associated with a specific reason. Here are some examples: 

Reason: Incorrect tax classification 

Legal Basis: Art. 711, I, of the Customs Regulations 

Penalty: 1% of the Customs Value (minimum R$500.00 and maximum 10% of the total value of the DI) 

Reason: Declared price different from arbitrated price 

Legal Basis: Art. 703 of the Customs Regulations 

Penalty: 100% of the difference calculated 

Reason: LI granted after shipment 

Legal Basis: Art. 706, I, b, of the Customs Regulations 

Penalty: 30% of Customs Value 

Reason: Importing goods for commercial purposes as luggage 

Legal Basis: Art. 702, III, b of the Customs Regulations 

Penalty: 50% Import Tax 

Reason: No packing list 

Legal Basis: Art. 728, VIII, e, of the Customs Regulations 

Penalty: R$500.00 

Reason: Omitting or providing inaccurate information 

Legal Basis: Art. 711, III and § 1 of the Customs Regulations 

Penalty: 1% of the Customs Value (minimum R$500.00 and maximum 10% of the DI value) 

Reason: Incorrect quantification in statistical measurement 

Legal Basis: Art. 711, II, of the Customs Regulations 

Penalty: 1% of the Customs Value (minimum R$500.00 and maximum 10% of the DI value) 

Reason: Incorrect Invoice 

Legal Basis: Art. 715 of the Customs Regulations 

Penalty: R$200.00 per invoice 

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Rectification of erroneous information

When incorrect information is identified, it is crucial to carry out rectifications as soon as possible. In the case of imports, the accuracy of the data on the bill of lading is fundamental, as it will guide the entire subsequent process. However, it is vital to be aware of the deadlines set by the IRS and transportation companies to avoid additional costs and delays. 

The fine itself is not the only damage caused by errors in import and export processes. In addition to financial penalties, errors can result in additional costs such as storage, demurrage and detention, as well as delays in the release of goods and impacts on commercial reputation. 

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Avoiding customs fines and other losses

Risk management plays a crucial role in reducing fines and losses in Foreign Trade. Here are some essential strategies for avoiding fines and other problems. 

1. Compliance

Compliance involves procedures and processes to ensure compliance with laws and regulations in the area in which you operate. Having technical knowledge is not enough; you need to pay attention to commercial, operational, legal, foreign exchange and customs procedures. 

2. Communication

Many fines are the result of miscommunication between the parties involved. It is therefore essential: 

Ensure that shipping instructions are complete and standardized. 

Know the technical terms of Foreign Trade in the language of negotiation. 

Meeting deadlines and being available to answer questions and queries. 

3. Technology

Investing in technology can reduce manual errors and improve process monitoring. Automation and the use of artificial intelligence can help identify typing errors and other non-conformities. 

4. Risk management

Risk management maps critical points and creates actions to mitigate risks in the process, including penalties. Identifying critical areas in documents and operations is essential. 

5. Knowledge of legislation

A thorough knowledge of customs legislation is essential. Keeping up to date and having access to legal sources is essential to avoid compliance problems.

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Count on an expert partner

The main message is that choosing the cheapest service provider is not always the best option. Each process is unique and requires specific planning and attention to detail.  

It is essential to choose a specialized service provider who has in-depth knowledge, respects deadlines and offers innovative solutions to ensure the success of import and export operations. Foreign trade fines can be avoided with the right combination of knowledge, technology and compliance. 

If you need to rely on experienced accounting advice, capable of providing the best strategies for your company to improve its financial performance, get to know CLM Controller's solutions now.