Cabotage
With regard to cabotage, the agency intends to extend the circulation period to five days, but proposes introducing a separation stage according to the type of cargo in order to offer Brazilian ships additional shipment options.
Circulation is a procedure through which the company interested in the charter circulates its demand to the Brazilian shipping companies in order to verify whether there is a Brazilian-flagged vessel available which is similar to that requested on the dates required. If no similar Brazilian flagged-vessel is available, the company will be released to voyage charter the foreign vessel.
It is expected that the proposed change to the norm governing chartering and cabotage will be presented at a public hearing in late October 2009. Users and shipping companies will analyze the agency‘s changes during a public consultation process.
The agency intends to maintain its prohibition on time chartering vessels, with the exception of the transportation of oil and its by-products. The agency believes that opening up the option to time charter vessels would discourage Brazilian shipping companies from investing in Brazilian-flagged vessels. However, the National Association of Cargo Transportation Users disagrees, claiming that the reserve of the market assigned to Brazilian shipowners has not been contributing to the expansion of the fleet.
Offshore Support
The agency is also considering changes to the norm governing the chartering of offshore support vessels. These proposals will also be submitted to public hearing and will concentrate on sub-chartering issues.
According to the existing rules, when a Brazilian shipping company charters a foreign vessel in order to sub-charter it to, for example, Petrobras, two circulations are required - one processed by the Brazilian shipping company that chartered the foreign vessel and another processed by the oil company. The agency intends to eliminate this second circulation and make the oil company inform the agency of the referenced sub-chartering. The agency‘s intention is to reduce red tape.
For further information on this topic please contact Godofredo Mendes Vianna at Law Offices Carl Kincaid by telephone (+55 21 2223 4212), fax (+55 21 2253 4259) or email (godofredo@kincaid.com.br).
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