The Association of Parliamentarians renews the question of the flexibility provided for in the "BR do Mar Programme"
The 2023 Report from the Mixed Parliamentary Association in Defense of the Brazilian Naval Industry, regarding the Cabotage Shipping Stimulus Programme (“BR do Mar” - Law No. 14.301/2022), emphasizes the importance of promoting the responsible updating of Laws No. 9.432/1997 about the organization of water transport in Brazil, and No. 10.893/2004, about the Additional Freight for the Renewal of the Merchant Marine (known as its local acronym "AFRMM") and the Brazilian Merchant Marine Fund (known as its local acronym "FMM"). The aim is to adopt regulations that foster the development of the Brazilian naval industry and navigation.
According to the Report, the BR do Mar Programme should be substantially revised to reduce the flexibility of importing foreign vessels for cabotage operations without taxes and to limit the access of the port sector to the FMM. This is to stimulate the Brazilian industry and navigation with greater demand, given the requirement of the Brazilian flag in cabotage and maritime support.
The Parliamentary Association supports its conclusions with the policies adopted by the United States in this sector, emphasizing that despite presenting liberal guidelines, the U.S. requires all vessels and their crews to be nationals. In contrast, Brazil is opening up the market through Law No. 14.301/2022, which is clearly damaging the domestic naval industry, national flag navigation, and the employment of Brazilians.
Another point of concern mentioned in the report is the reduction of resources for financing the Brazilian shipbuilding industry, due to the reduction of the AFRMM rate from 25% to 8% on freight value, as well as the expanded access to FMM resources for the port sector.
In view of these considerations, it is proposed that some adjustments be made to the Decree regulating Law No. 14.301/2022, including the provisions that:
- for the transport of oil and its derivatives in national cabotage, the equivalent of 50% of the tonnage of Brazilian vessels built in Brazil, actually in service and owned by the economic group, should be established as the limit for chartering foreign vessels; and
- for this transport segment, a minimum term of 15 years should be required for the contract between the Brazilian Shipping Company (EBN) and the shipper for the right to charter foreign vessels.
As evident from the above, the BR do Mar Programme, instituted in January 2022, is still subject to criticism by lawmakers who argue that the Programme is out of sync with the Federal Government's policy of generating direct and indirect employment in the naval industry and in the outfitting and operation of Brazilian vessels.
Law No. 14.301/2022 is available here, Law No. 9.432/1997 here, and Law No. 10.893/2004 here, all in Portuguese.
The Maritime team is available in case of doubts.