Paulo Fernandes February 2 2022 ANTAQ issues new resolution regulating rights and duties of users and shipping companies Kincaid | Mendes Vianna Advogados | Shipping & Transport - Brazil Paulo Fernandes Shipping & Transport BackgroundTopics covered by Resolution No. 62Penalties for breachBackgroundOn 1 December 2021, the National Waterway Transport Agency (ANTAQ) published Resolution No. 62, establishing the rights and duties of users, intermediaries and companies operating in offshore support, port support, cabotage and deep-sea navigation, as well as penalties for breaches of such regulations.Resolution No. 62 revokes Resolution No. 18 of 2017, which covered the same subject matter, as well as Resolution No. 7856 of 2020, which provided for the application of prices, freight, fees and surcharges in navigation. Resolution No. 62 consolidates in a single instrument the provisions of the revoked resolutions. Resolution No. 62 took effect on 3 January 2022.The discussions about this resolution go back to August 2015, when ANTAQ submitted to public hearing the first draft proposal of the regulation in relation to the rights and obligations of users. The initial draft was strongly challenged by shipping companies. In November 2016, ANTAQ submitted a new draft to public hearing. Although the 2016 draft was considered by the market not to be well balanced, it was converted into Resolution No. 18. This has now been revoked.Topics covered by Resolution No. 62The main topics covered by Resolution No. 62 are as follows:the regularity of the frequency and calls offered to users;an indiscriminate and egalitarian guarantee of the offer of services to all users, to the fullest extent possible;the adoption of prices, freight, taxes and surcharges on a fair, transparent and non-discriminatory basis that reflects the balance between the costs of the performance of services and the benefits offered to users, allowing for the improvement and expansion of services, in addition to appropriate remuneration;information relating to freight, other fees and surcharges priced in foreign currency, which should not be converted to national currency using exchange rates that are incompatible with the relevant market. The incompatibility of exchange rates with the appropriate market will be determined by ANTAQ using the exchange rates established by the Central Bank on the date that an invoice is closed as a basis;compliance with the set out or estimated deadlines for performance of the services, as contractually laid down, formally scheduled between the parties or reasonably required;correct, clear, accurate and ostensibly available information to be provided for users. The following items are highlighted:prior knowledge of all services being rendered and charged; andoperations or availability to be contracted by users, including the specification of the applicable prices, freight, taxes and surcharges.Such information shall be clearly and precisely accessible to the shipper, consignee, endorsee or bearer of the bill of lading until execution of the contract, regardless of whether they are a contracting party; andthe responsibility of sea carriers to inform the user, shipper or consignee, as the case may be, of changes in the deadline for delivery of the cargo or for the arrival of the vessel that may cause damage to the said intermediaries.Resolution No. 62 still determines that the Brazilian shipping companies of offshore and port support navigation shall observe provisions similar to those that have been mentioned above.Ocean carriers and intermediate agents cannot refuse the carriage that they are asked to perform, except for the cases listed in the rule, which include the non-observance of legal or regulatory precepts on the part of the shipper and the user's evidenced default before the sea carrier to be contracted.It is also recognised that sea carriers and intermediate agents may retain goods or prevent the issuance of the bill of lading until the settlement relating to the payment of the freight or of the general average contribution. They are barred from making a retention for any other reason.The rule also addresses rules and concepts regarding the demurrage of containers.Penalties for breachThe chapter relating to administrative infractions and penalties is quite comprehensive and sets forth provisions on the amount of the fine. The amount of the fine takes into account the company size. The administrative infractions are categorised as low, medium and serious, and are applicable both to users and to companies. The fines categorised as low and medium can reach up to 100,000 Brazilian reais, whereas those categorised as serious infractions can reach up to 1 million Brazilian reais.For further information on this topic please contact Paulo Fernandes or Juliana Pizzolato Furtado Senna at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email ([email protected] or [email protected]). The Kincaid | Mendes Vianna Advogados website can be accessed at www.kincaid.com.br.