On February 25, 2016, Normative Resolution No. 5 (“Resolution”) was issued by the Brazilian National Agency of Waterway Transportation (“ANTAQ”), thereby setting forth the criteria and procedures necessary to grant authorization to legal entities with corporate purpose related to navigation and maritime support, as well as port support, long distance and cabotage services. Said entity, designated as a Brazilian navigation company (empresa brasileira de navegação) (“EBN”), must be incorporated in Brazil and have its headquarters and management in Brazil. A 90-day period was provided for currently authorized and operational EBNs to adapt to the new rules set forth in the Resolution, especially those related to the adequacy of the vessels for their intended navigation.

The Resolution does not permit the transfer of authorization granted by the authorities to EBNs. On the other hand, among other obligations to report, the Resolution sets forth that an EBN must inform changes in its corporate control within 30 days from the date of its occurrence.

EBNs must comply with certain technical, economic, legal and tax requirements in order to obtain authorization of its activities by ANTAQ. The EBN must maintain certain minimum requirements set forth in the Resolution to sustain its operation and shall (i) present to ANTAQ, whenever requested, evidence that the requirements have been duly met and (ii) authorize ANTAQ’s inspection. Furthermore, the Resolution grants ANTAQ the authority to prohibit any practice performed in the market which may be considered harmful to competition practices and to the end users.

It is always worth mentioning that EBNs authorized by ANTAQ have the option to obtain financing with resources from the Brazilian Merchant Marine Fund (fundo de marinha mercante) for the construction of vessels with intent to navigate.