BRAZIL Law and Practice Contributed by: Godofredo Mendes Vianna, Camila Mendes Vianna Cardoso and Lucas Leite Marques, Kincaid | Mendes Vianna Advogados
9. Additional Maritime or Shipping Issues 9.1 Other Jurisdiction-Specific Shipping and Maritime Issues On 7 January 2022, Congress enacted Law No 14,301/2022, which amended the rules appli - cable to cabotage transportation (ie, maritime transportation between Brazilian ports) and cre - ated the so-called “ BR do mar ” regime, updating the former regulatory framework of 1997. For decades, the use of foreign-flagged vessels in Brazil in domestic trade was only admitted where: • Brazilian-flagged vessels were not available; or • the shipping company owned Brazilian ton - nage. This regime has been substantially changed by the new law, which now allows more flexibility for foreign-flagged vessels to trade within Brazilian cabotage. One of the main changes is the possibility for Brazilian shipping companies to time-charter vessels from foreign wholly owned subsidiaries (or from a foreign wholly owned subsidiary of another Brazilian shipping company) in the fol - lowing cases: • fleet expansion; • the replacement of vessels being constructed in Brazil or abroad; • vessels under repair; • for engagement in long-term contracts; and • for use in so-called “special cabotage opera - tions” (ie, those intended to transport cargo of a type, route or market that does not yet exist or that has not yet been consolidated).
The new law also provides for a gradual increase in the number of foreign vessels that can be bareboat-chartered with suspension of the origi - nal flag to Brazil by Brazilian shipping companies without the prior approval of the National Water - way Transportation Agency ( Agência Nacional de Transportes Aquaviários ) or correlation with Brazilian tonnage. The allowance applies to at least one vessel currently, and one vessel per year can be added until 2026, when no limita - tions on the quantity of vessels will apply for demise and bareboat charters. Although these changes are among the most significant for cabotage restrictions in the coun - try, the new law also changed provisions relating to additional freight, financing, the possibility to create investment companies in shipping, and other matters.
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