Brazil’s Portal Único Siscomex is designed as a single system connecting the authorities in charge of taxes, licensing and surveillance. One of the latest modules of the Portal is a Product Catalogue (PC), where products are described using “attributes” pre-defined in an Attributes Registry (AR).

One of the attributes allocated to a product is its Customs nomenclature code, which provides the foundation for determining duty rates and taxes, and for applying a wide range of trade policies, such as preferential treatments. The PC/AR systems do not serve as an alternative to the Customs nomenclature, but enable Customs and various governmental agencies regulating international trade to access more detailed information on products and to enhance their monitoring and control capacities as a result.

In Customs goods nomenclatures, some goods are subsumed within a broader group of goods in the same classification. As they are hidden as an unknown quantity within the broader class of goods with which they share a classification, enforcing regulations on the cross-border movements of these goods is problematic. Besides the Customs nomenclature, there are a multitude of classification systems in use to classify products – for example SITC (United Nations’ Standard International Trade Classification), CPC (Central Product Classification), CPA (Classification of Products by Activity), NAPCS (North American Product Classification System), NICE (the International Classification of Goods and Services), GPC (Global Product Classification), GHS (Globally Harmonized System of Classification and Labelling of Chemical), and ATC (Anatomical Therapeutic Chemical). Between international, national and private classification systems, any acronym you can think of is likely to be a classification system for goods somewhere.

What distinguishes the PC and AR is their unique approach to product identification. In contrast to the numerical codes typically used in foreign trade, these systems employ natural language to define and characterize goods. This approach transcends the limitations of numerical nomenclatures, addressing fiscal considerations and multifaceted trade needs, spanning commerce, health, public safety, metrology, and more.

The Attributes Registry is accessible solely to governmental agencies, while companies hold the responsibility for enriching the Product Catalogue. It was developed by defining attributes for each Customs nomenclature code. In other words, qualities or features regarded as a characteristic or inherent part of a good concerned have been established for each code, as well as, where necessary, content restrictions. Figure 1 shows the attributes for CMN 7318.15.00. Each attribute includes a field related to the category of the information and a field related to the information itself.

The beauty of this system lies in its ability to be developed incrementally, focusing on the priorities of various government agencies involved in trade controls, particularly those streams of trade representing the higher risks. This means that attributes for a specific product code do not need to be defined all at once. They can be established progressively as agencies identify the attributes relevant to their specific controls and trade operators provide more inputs. Moreover, outdated attributes can be removed if needed.

PC/AR systems not only demonstrate remarkable flexibility and adaptability, but are also user-friendly and intuitive.

Once attributes are identified for each CMN code, exporters and importers are asked to register the products they currently trade or plan to trade, and to provide an accurate description using the attributes defined in the Attributes Registry, as well as provide documents relevant for characterizing the merchandise (for example, drawings, sketches, photographs, operation manuals, and technical reports).

The PC platform also enables seamless exchange of information. Traders can contact Customs and regulatory agencies about the Customs classification of their merchandise or the attributes to be used to describe it. Customs and regulatory agencies not only provide support and technical guidance through the platform, but can ask traders for information or supporting materials.

Inputs from traders are analysed through algorithms designed to identify errors in merchandise classification and inconsistencies in attribute information. Individuals entering data in the catalogue receive notifications about detected issues, prompting them to take corrective actions. Officers working for regulatory agencies also receive notifications about potential risks associated with merchandise description and classification, further enhancing the efficiency and accuracy of the entire classification process.

Once a product is registered in the PC, it receives a unique code that serves as an identification number to be included in Customs declarations and a myriad of other electronic documents used in foreign trade operations. Adding this code to these documents is a game-changer, eliminating the need for operators to redundantly input data that is already securely stored in the system for each operation, and streamlining processes for multiple government agencies and facilitating classification controls.

In this innovative information management model, the realm of Customs undergoes a notable transformation. There is no longer a necessity for tariff classification checks to be conducted during import or export clearances for catalogued goods. These verifications now take place in a centralized manner, well in advance of actual operations, capitalizing on the data readily available within the PC. The result is a marked reduction in both resource and time expenditure. As the clearance process unfolds, the verification task becomes markedly more straightforward, eliminating the need for arduous determinations about tariff classifications. Instead, the primary responsibility pivots toward confirming that the merchandise aligns with the PC description and checking the quantitative aspects of the operation.

The main benefits of implementing and using PC/AR systems are as follows:

• Enhanced regulatory enforcement: implementation of PC/AR systems notably enhances the control capacities of Customs and other regulatory agencies involved in the oversight of foreign trade.
• Consolidated control procedures: the PC/AR systems allow for the consolidation of Customs and other foreign trade control procedures, leading to efficiency gains.
• Simplified trade procedures: a product identification code can be used for every transaction or document.
• Error reduction: as more attributes are entered in the AR, there is a substantial and progressive reduction of errors in merchandise classification.
• Enhanced support to trade operators: easy communication with law enforcement officers, as well as automatized analysis of the input data through algorithms, reduces the risk of error from traders.
• Enhanced legal certainty: trade operators are more confident that the classification of their goods is correct and that they are compliant with regulations.

This remarkable advancement owes its success to the contribution of the private sector, which was spearheaded by Instituto Aliança Procomex (see article in WCO News 97 – Issue 1 / 2022). The operation arm of the Procomex Alliance, which comprises 136 Brazilian business associations, the Instituto Aliança Procomex adheres to a clear mission: consolidating private sector efforts to assist the public sector in modernizing border management processes. The overarching objective is to enhance Brazil’s competitiveness on the global stage.

In pursuit of this mission, it established in 2017 a Systems Group, gathering professionals spanning Customs, the Foreign Trade Secretariat (Secex), agriculture, health, SERPRO (the governmental agency responsible for Customs systems), and companies involved in operations and systems. The Systems Group members convene regularly to discuss the development and implementation of Brazil’s new Single Window for trade. In 2019, during one of these meetings, Instituto Aliança Procomex was formally engaged in the building of the AR/PC systems and asked to request input from the private sector to define the attributes characterizing Brazil’s exported and imported products.

It orchestrated and managed a series of meetings where private sector representatives from diverse sectors of the country’s economy collaboratively analysed and defined attributes for each of the 10,300 codes of the Common Mercosur Nomenclature (CMN), which is a two-digit extension of the WCO Harmonized System (HS). A total of 38 meetings took place, drawing participation from more than 1,800 professionals from 700 companies, 76 professional associations, key governmental bodies such as the Federal Revenue of Brazil (RFB), Secex, and the regulatory bodies overseeing each sector’s operations.

At the end of the meetings, the private sector representatives had drafted an impressive 29,800 attributes whose relevance and alignment with the corresponding CMN codes needed to go through a thorough technical evaluation. This is where the World Bank intervened by organizing a competitive process to select an organization with the necessary expertise and knowledge to do the job. The Instituto Aliança Procomex was chosen and started consolidating, assessing, and harmonizing the attributes developed by the private sector.

Still funded by the World Bank, a subsequent phase saw regulatory agencies brought into the process to supplement the private sector attributes with the attributes needed to perform administrative controls on the imports and exports under their jurisdiction. Here again, Instituto Aliança Procomex harmonized the attributes put forward by regulatory agencies and those suggested by the private sector.

The culmination of this extensive effort led to the publication of a dataset and the launch of a public consultation, initiated by the Portal Único Siscomex Management Committee. This step provided the private sector with another opportunity to evaluate the established attributes. The process garnered over 17,700 contributions, which were meticulously analysed.

On 6 November 2023, a first set of attributes was integrated into the production  environment of the Siscomex Portal, enabling the private sector to initiate the registration of their products in the Product Catalogue. What had seemed to many like an impossible task had been completed thanks to the joint collaboration between the public and private sector. This partnership has ushered in a more user-friendly, efficient, and transparent system, where attributes redefine the way products are identified. As these attributes become accessible to the private sector, the dawn of a new era in foreign trade operations can be witnessed, where both public and private entities work hand in hand to drive progress.

Today, Brazil’s foreign trade landscape is being transformed through the deployment of Portal Único Siscomex version 2.0, which stands as a testament to the remarkable power of cooperation. Brazil’s journey is a resounding example of the incredible potential that emerges when unity and a shared vision shape the future. The path ahead promises continued growth and success, with the synergy between the public and private entities paving the way for a brighter, more efficient tomorrow where cross-border trade operations are compliant, safe and benefit from a high level of certainty.

More information
www.procomex.org.br