In a meeting held in July 2016, Brazil's National Industry Confederation (CNI) asked the Ministry of Foreign Affairs to terminate the maritime transport agreement between Brazil and Chile, signed on April 25 1974 and promulgated by Decree 75,246/1975.

In accordance with the treaty, maritime transports of goods between the two countries – with the exception of oil, its liquid derivatives and natural gas – must be made under Brazilian and Chilean-flagged vessels, including cargo that receives any government benefit from either country.

The use of third-party flagged vessels is permitted only where no Brazilian or Chilean-flagged vessels are available.

The Brazilian Shipowners Association (Syndarma) opposed the termination of the 40-year treaty, which strengths the Brazilian and Chilean flags and the shipbuilding industry of both nations.

Notably, the agreement is automatically renewed every five years, unless one of the countries, at any point, informs the other of its intention to terminate the agreement with at least 120 days' notice.

A representative from the Brazilian Ministry of Foreign Affairs stated that the government's decision on this matter will consider not only the position of the Ministry of Foreign Affairs, but also the Ministry of Transport, Ports and Civil Aviation and the Ministry of Industry, Foreign Trade and Services.

The Brazilian and Chilean maritime communities are still uncertain about the future of the treaty and a position from the Brazilian Ministry of Transport, Ports and Civil Aviation in this regard may play an important role in this discussion.

For further information on this topic please contact Godofredo Mendes Vianna at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email (godofredo@kincaid.com.br). The Kincaid | Mendes Vianna Advogados website can be accessed at www.kincaid.com.br.

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