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Commercial overview of the shipping industry

Brazil is the largest country in Latin America. It has a population of approximately 211 million people and a total land mass larger than America, excluding Alaska. It has in excess of 8000 kilometres of coastline and 20,000 kilometres of navigable river. Brazil has the 12th largest gross domestic product (GDP) in the world.

In 2021, Brazil had 0.244 per cent of the world's merchant fleet value, by flag of registration, with a total fleet of approximately 5.5 million deadweight tonnage (DWT) and 0.655 per cent DWT under Brazilian ownership. Approximately 50 per cent of this tonnage is oil tankers, 12 per cent bulk carriers, 2 per cent general cargo vessels, 14 per cent container ships and 22 per cent are 'other types'.

In 2021, 864 ships were registered under the Brazilian flag. During the same period, Brazil had approximately 29,000 registered seafarers. Container port throughput for 2021 was 10,130,740 tonnes, an increase of 10.71 per cent in comparison to 2020. These numbers are evidence of Brazil's developing shipping market even during the covid-19 pandemic years. In 2019, Brazil's shipbuilding sector was responsible for the production of 142,898 gross tonnage (GT).

In 2021, Brazil reaffirmed its position as a leading producer and exporter of soybeans (US$28.6 billion), iron ore (US$26.5 billion), crude petroleum (US$19.8 billion), raw sugar (US$8.95 billion), and frozen bovine meat (US$6.69 billion), exporting mostly to China (US$67.9 billion), the United States (US$21.9 billion), Argentina (US$8.57 billion), the Netherlands (US$6.7 billion) and Canada (US$4.39 billion), as their main trading partners.

Brazil is a significant exporter of aircraft, helicopter, spacecraft and car and vehicle parts. Brazil's main export trading partner is China (US$63.358 million), with the United States in a distant second place (US$29,860 million). Other strong trading export links are with the Netherlands, Argentina and Japan.

There are approximately 178 coastal and river ports in Brazil. Of these, approximately 34 are public and 144 are private. Public ports are administered by state-run dock companies or by concession and leasing agreements. Private ports account for approximately two-thirds of all cargo movement in Brazil.

General overview of the legislative framework

The legislative framework for shipping is scattered across many different statutes. Key legislation is contained in the Brazilian Federal Constitution, the Brazilian Commercial Code dated 1850 and the Brazilian Civil Code dated 2002, which regulates contracts of carriage.

There are also other uncodified statutes, such as Federal Law 2,180/1954, which regulates the Admiralty Court and its jurisdiction, Decree-Law 116/1967 addressing, inter alia, limitation for cargo claims in shipping disputes, and Federal Law 7,542/1986, which regulates wreck removal.

Federal Law 10,233/2001 created the Brazilian Waterway Transportation Agency (ANTAQ), whose mandate includes the regulation of domestic and international waterway carriage of people and goods, offshore platform and port supply navigation, ports and terminals and the exploitation of the federal waterway infrastructure.

Federal Law 9,537/1997 regulates waterway safety in Brazilian territorial waters, Federal Law 9,432/1997 provides the statutory framework regulating waterway transportation, while Federal Law 9,611/1998 regulates multimodal transportation.

Federal Law 14,301/2022 (the Cabotage Act), which was enacted on 7 January 2022, has brought necessary and long-awaited innovations, seeking to facilitate investment, especially from overseas.

Brazilian Navigation Companies (EBNs) are no longer required to own their own fleet and the bareboat charter of foreign vessels will be allowed. Chartering is subject to the provisions of the Cabotage Act. Among other new rules, EBNs are now permitted to charter foreign vessels without the need for proof of tonnage. Under the previous regime, EBNs' ability to charter foreign vessels was limited by ANTAQ Regulations.

EBNs applying to the new regime must provide evidence of their compliance with federal taxes and agree to periodically present information on the scope of their activities, improvements in the quality of their service, their level of local employment, sustainability and transparency regarding the costs of freight.

The Brazilian Navy, which acts as the Brazilian Maritime Authority, has an active role in shipping matters. It presides on the procedures tried before the Admiralty Court and issues norms, which are mandatory law within Brazilian jurisdictional waters, known as NORMAM.

In terms of international conventions, Brazil is not a signatory to the Hague, Hague-Visby, Hamburg or Rotterdam Rules. However, Brazil has ratified most of the conventions on marine safety, such as COLREGS, SOLAS and the International Convention on Salvage.

Brazil has also ratified the International Convention on Maritime Liens and Mortgages.

In practical terms, the statutory framework outlined above is designed to protect and develop the local shipping market.