Our man in Brasília

Meet Robbert Appeldoorn, the Dutch customs attaché in the largest country in South America. “We can surely learn a lot from each other’s experiences.”

Robbert Appeldoorn is Customs Attaché since September 2016 in by far the biggest country of South America. From the capital he helps to strengthen the cooperation with the Brazilian colleagues, for the sake of both enforcement and trade facilitation. “We can surely learn a lot from each other’s experiences.”

Before coming to Brazil, Appeldoorn was an Attaché in Russia. “Actually I had prepared myself to return to the Netherlands after five years in Moscow. It is not common practice to immediately change one working place for another one. But when in 2016 this opportunity arose, I did not hesitate. It was quite nice actually to move from -30 to +30 degrees. As I did in Moscow at the time, I opened the department in Brasília myself. There are advantages to start from scratch, especially when you have an enterprising mind – and all Customs Attachés have. Brazil is a network country par excellence. You are whom you know. In such a large country this does not only mean to know the central authority in the capital. You also want to visit the ten operational customs regions, from Manaus to the Amazon, to Rio Grande do Sul in the south and all the international airports and seaports. This may take a while. The country covers 48% of the surface of South America and it is by far the largest economy. The size of Brazil is more like a subcontinent than a country.”

Trading with obstacles
Is the country attractive for foreign investors and entrepreneurs? “Brazil always had great potential but until recently it was an almost entirely closed economy”, says Appeldoorn. “Less than 30 years ago, the tariff barriers that were created were sky-high. The import duties had an average of 120 percent, for the protection of the interior market and employment. Everything was homemade, from pegs to refrigerators. That is why it was practically impossible for companies to import and for a long period of time Brazil had no real connection to the world economy. At the turn of the century this protectionist attitude started to change. When on top of that large oil fields were discovered, this led to the creation of an economy in the global top-10.”

Even though Brazil gradually began to flourish over the past fifteen years, very few companies decide to create a firm foothold in the country, Appeldoorn says. “In the past it was difficult to establish yourself here as a foreign entity, so for practical reasons most companies – also many Dutch businesses – have chosen a Brazilian legal form. When it comes to for example financing and insurances, it is still hard to get anything done. But over the past few years, this has improved, Brazil is climbing on the international rankings.”

Opportunities for cooperation
Dutch companies are used to the fact that their products easily find their way to the EU member states. But exporting to a third country is a different story, says Appeldoorn. “It is not a matter of sending a small box to Brazil and then expecting that it arrives automatically. The Brazilian customs legislation is stated in full on the Internet. In that respect the transparency is significant, but you don’t get a helping hand in any concrete form or a checklist. As an entrepreneur you have to comply with all the regulations carefully, because the tolerance for error is close to zero. When people think of Brazil, they often think of sun, sand, sea and samba. It is indeed a very nice country to be in, but the government is strict. It also is divided into three parts – the government at a federal, state and municipal level, all three having their own tax regime. In short, it is no market for beginners. Nonetheless, the Netherlands sees sufficient opportunities for cooperation. Otherwise I would not have been here. And our Brazilian colleagues are actively involved in simplifying the customs system, so that it becomes more attractive to foreign companies. The import duties have meanwhile been considerably reduced.”

Superior information position
Just like the Netherlands, Brazil has a federal tax authority with a fiscal and a customs service that is part of the Ministry of Finance, Appeldoorn says. “Such a comparable set-up is useful; you don’t need to explain anything to each other about the organisational structure. However, there are overlapping jurisdictions. In addition to the tax authority, the federal police combat a phenomena such as money laundering. An anti-fraud organisation like our Fiscal Information and Investigation Service does not exist unfortunately.”

Remarkable: no matter how big Brazil is – the Netherlands fits in it more than two hundred times – only 3500 people are working at customs. Appeldoorn: “The employees profile is less differentiated. Only people at a higher professional education and graduate level are employed, after having passed a tough entrance exam. Attempts are made to compensate the lack of manpower by a superior information position and smart technology. Rio de Janeiro is the seat of a risk analysis centre which makes clever profiles on the basis of artificial intelligence models. Thus the number of physical interventions can be kept as low as possible. In the main port Santos only fifty employees are present per shift, whereas in Rotterdam many hundreds are deployed. But this limited physical presence is compensated by all in all 2500 cameras situated all over the Santos port area. As Dutch Customs has started with camera surveillance recently, we can learn from the experiences of our Brazilian colleagues.”

Drug smuggling addressed
This smart surveillance is very much needed, Appeldoorn says. “In the year of my arrival the Colombian production of cocaine increased by several tens of percent, and the next several years this growth continued. From countries like Peru and Bolivia consignments of cocaine travel through Brazil. Moreover Brazil is not only a transit country, but is after the United States, the world’s largest consumer of cocaine. This means that combating drug smuggling is no longer a side activity in addition to trade facilitation. The Brazilian government succeeds in seizing a significant number of tons on the route to the Atlantic coast. Also in the ports everything is being done to intercept the drugs with the aid of scanners, dogs and a thorough analysis of cargo documents. In order to tackle the problem, I have regular contacts with my customs colleagues in the largest ports and airports of Brazil. Our services exchange information on the catches in our countries and on noticed modus operandi. In this way we strengthen our mutual enforcement efforts. What helps is that the corruption among Brazilian customs officers is low, also because their wages are approximately just as high as those of their Dutch colleagues. Moreover, all operations carried out within the import and export process are electronically recorded.”

AEO the Brazilian way
Besides combating smuggling and other criminal activities, fortunately enough time is left for the support of companies. Appeldoorn: “My assistant and me are a close-knit team. Heloisa is an excellent networker who knows how to open doors that remain closed for others. Moreover she conducts open sources research for me. The profession of being a customs officer intrigued her enormously, because she is studying for a Masters degree in international business and has a full command of the jargon. Initially she also interpreted and translated for me a lot. As my Portuguese has become quite good now, it is less needed.

Quite often, companies and citizens first come to the economic department with their queries, of which some are passed on to me. And for general information, the Netherlands Enterpise Agency is a good option. As my colleagues attachés said in previous editions of this series: we are not consultants. I don’t have any influence on investment decisions; I don’t say what a customs declaration should look like or what the proper commodity code is. But you can come to me with specific questions about a certain customs regulation. This also holds true for well-intentioned, complying companies finding themselves in an annoying situation through no fault of their own.”

“Furthermore Brazilian customs are working with our assistance on the implementation of their own AEO system, comparable to the one of the European Union”, Appeldoorn concludes. “It provides all kinds of simplifications and facilities for companies including the choice of location of a customs inspection. Customs are also trying to build in regularity in handling the shipments. It is annoying when sometimes a shipment is released after six days and at other times after seventeen days. If things go well I will live to see that Dutch entrepreneurs will clearly benefit from such developments.”

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