Portuguese 
English 
Spanish 
4 min of reading 
0 comments 
The Effects Of AFRMM Boost The Modernization Of Fleets And The Financial Health Of The Brazilian Naval Industry, Promoting Initiatives That Ensure The Development Of The Sector.
The impact of AFRMM is essential for the evolution of the naval industry in Brazil, ensuring the constant renewal and updating of vessels. The industry depends on investments that provide technological improvements and support sustainable growth in the sector. In this way, numerous initiatives are conducted to strengthen the competitive capacity of companies and modernize their fleets.
In addition, the Additional Freight for the Renewal of the Merchant Navy (AFRMM) plays a crucial role in the financial health of the country’s naval industry. With these resources, new construction projects are made feasible, and the infrastructure needed to support economic demands is continuously improved. The integration of new technologies and processes is vital to keep the industry dynamic and efficient, ensuring that the Brazilian merchant navy remains competitive in the global scenario.
Importance Of AFRMM For The Naval Industry
AFRMM (Additional Freight for the Renewal of the Merchant Navy) plays a crucial role in the recovery of jobs in the naval sector. As an example of these initiatives, we have AFRMM, which is a Contribution to Intervention in the Economic Domain (CIDE). Although its existence was regulated in 2004 by Law 10.893, from 1997 by Law 9.432, its goal is to provide financing for the construction and modernization of Brazilian fleets. The surcharge applies to freight for transporting goods unloaded at Brazilian ports, whether in Importation, cabotage services (maritime transport between national ports) or inland navigation, carried out by rivers.
-
A billion-dollar lawsuit against Microsoft in the United Kingdom is advancing and challenges the Windows Server cloud pricing policy that may have impacted thousands of companies and favored Azure in the global market.
-
Nubank’s billion-dollar offer could take the Naming Rights from Allianz Parque and change the identity of Palmeiras’ stadium.
-
Nubank’s billion-dollar offer could take the Naming Rights of Allianz Parque and change the identity of Palmeiras’ stadium.
-
Oncorp wins auction and enables biodiesel and gas thermal plants in Brazil, with strategic projects in Suape and Xavantes Aruanã.
Use Of AFRMM And Destination Of Resources
The amounts collected through AFRMM are destined for the Merchant Navy Fund (FMM), managed by the Ministry of Ports and Airports, through the Secretariat of Inland Waterways and Navigation. This fund is then used to finance construction and modernization projects for fleets in Brazilian shipyards. It is important to note that, according to Law 10.893, the AFRMM collected through cabotage, long-haul, and inland navigation, carried out by Brazilian-flagged vessels operated by national shipping companies, is intended for those very companies. These amounts are deposited into the linked account of the companies at Banco do Brasil, managed by BNDES.
Generation And Calculation Of AFRMM
The amount of AFRMM is calculated according to the type of navigation and the product transported, varying from 8% to 40%. For cabotage services, the rate is 8% on the waterborne freight. However, in practice, a large part of the clients does not bear the AFRMM due to a legal provision that exempts this additional charge for the transport of goods destined for or originating from the ports of the North and Northeast regions. This same provision determines that the shipping companies must be reimbursed for these amounts, a responsibility that has fallen to the Federal Revenue since 2014.
Challenges In The Management Of Reimbursement
However, dealing with the Federal Revenue has been a significant challenge. Since 2019, the reimbursed amounts have decreased. In 2024, for example, payments were approximately half of those in 2023, and only 28% of the amounts reimbursed in 2022 were paid. This scenario has caused significant problems for shipping companies that rely on the resource for investments in the construction and modernization of their fleets. The Federal Revenue attributes such problems to a lack of budget, trained personnel, and an adequate system. Since 2014, an adequate system for the validation of information has not been implemented, resulting in manual payments with significant delays.
Blockages And Consequences
In January 2023, an update of the information validation system by the Federal Revenue led to the blockage of 100% of AFRMM reimbursements for all shipping companies, due to the implementation of excessive restrictions in the system. As a result, companies spent most of the year 2023 without receiving reimbursements, with payments occurring only in the last quarter. Several companies are still waiting for payments since January 2023. This situation has drastically affected the financial health of the companies, leading to a debate in the Chamber of Deputies in June 2024, organized by ABANI, the Parliamentary Front for Inland Navigation and Naval Industry, and other entities.
Discussions And Future Of AFRMM
At the event, the Federal Revenue revealed that there are over R$ 800 million in pending AFRMM reimbursements, with R$ 638 million for cabotage and R$ 214 million for inland navigation. One of the solutions discussed was the transfer of the management of reimbursement to the Ministry of Ports and Airports, under the Secretariat of Inland Waterways and Navigation, promising simplification and deregulation through a structural and regulatory review.
Benefits And Impacts Of AFRMM
The benefits of AFRMM for the naval industry are extensive. It allows navigation companies to finance the construction of new ships, maintenance, and modernization of vessels exclusively in Brazilian shipyards, discouraging the internationalization of this type of initiative. This, in turn, generates jobs, promotes technological innovation, and strengthens the competitiveness of the naval sector. Furthermore, AFRMM is vital for the development of cabotage, allowing the expansion and modernization of the national fleet, making it a viable alternative to the road modal and contributing to a more balanced and sustainable transport matrix.
Importance Of Legal Security
Beyond strengthening the naval industry, the impact of AFRMM resonates throughout the Brazilian economy. Understanding the details of the tax and ensuring legal security for investments is crucial for companies in the sector to make strategic decisions and better take advantage of the benefits provided by AFRMM.
Source: Eduardo Simeone, Legal Director, Compliance and Government Relations of Log-In Integrated Logistics.
Be the first to react!