ANTAQ Announces Public Consultation and Hearing to Improve Draft Resolution for Chartering Criteria for Brazilian Shipping Companies

Brazil’s National Agency of Waterway Transportation (“ANTAQ”) will hold a Public Consultation and Hearing from September 9 to October 23, 2024 (Notice of Public Hearing No. 11/2024). The aim is to receive feedback on a draft resolution establishing the procedures and criteria for the chartering of vessels by a Brazilian Shipping Company (Empresa Brasileira de Navegação - EBN) in port support, maritime support, cabotage, and long-distance navigation.

The draft resolution reviews ANTAQ Normative Resolution No. 01/2015. This seeks to adapt to Law No. 14,301/2022, which establishes the Cabotage Transport Promotion Program (“BR do Mar”). The main changes are listed below:

(i) Exclusion of items that referred to prescribed cargo: Conforms with ANTAQ Ruling 652/2021, which suspends the issuance of the Certificate of Release of Prescribed Cargo (CLCP), in accordance with Item XV of Article 57 of Law No. 14,195/2021.

(ii) New definition of Brazilian flagged vessel: The draft resolution defines a Brazilian vessel as “one that has the right to sail under the Brazilian flag, regardless of where it was built or how it was incorporated into the operator's fleet,” clarifying that vessels definitively imported into the country or otherwise incorporated into the shipowner's fleet will be considered Brazilian.

(iii) Incorporation of the concept of a Brazilian Shipping Investment Company (EBIN): The draft resolution provides the same definition as in BR do Mar, establishing an EBIN as “a company whose purpose is to charter vessels to Brazilian or foreign shipping companies.” An EBIN cannot operate the vessels it owns or charters, so—as stated by ANTAQ—such authorization is intended to enable investments and financing operations.

(iv) New definition of Brazilian Shipping Company: The draft resolution defines a Brazilian shipping company as “a legal entity incorporated in accordance with the provisions of Brazilian law, with its head office in the country, whose purpose is waterway transport or maritime or port support navigation, authorized to operate by ANTAQ, with its own or chartered vessels,” formally accounting for the possibility of operating without owning a fleet.

(v) Inclusion of the definition of Corporate System: In view of the sole paragraph of Article 26 of the draft amendmentwhich establishes that the approval of vessels in an EBN’s fleet will be carried out within the scope of the Corporate System, it was necessary to include its concept. The regulatory proposal defines the Corporate System as “ANTAQ's computerized system for registering companies, vessels, ports and terminals for private use, as well as registering and controlling grants.”

(vi) Flexibility in the options for chartering in cabotage navigation: Item IV of Article 4 of the draft resolution establishes that the chartering of a foreign bareboat vessel—with the suspension of its flag—in cabotage navigation is not subject to authorization, regardless of the construction contract in force, or of the ownership of a Brazilian vessel, considering the limit on the number of vessels will increase until 2026, when it will no longer have a limit. With this, the draft resolution reflects the wording of Br do Mar.

(vii) Replacement of a vessel in dock: Through Item V of Article 4, the draft resolution establishes that authorization will not be required to charter, by voyage or time, a foreign vessel to operate in cabotage navigation as a substitute for a vessel of a similar type—owned or chartered—which is undergoing jumboisation, conversion, modernization, docking, or repair, in-country or abroad, in the proportion of up to 100 percent of its deadweight tonnage. The amendment requires the submission of a docking plan.

(viii) Formalization of the exclusion of the charter limit for vessels in cabotage subject to the circularization procedure: As determined by the Federal Court of Accounts (Tribunal de Contas da União - TCU), in order to authorize the chartering of foreign vessels in cabotage navigation—in the form of bareboat without suspension of flag, by space, by time, or by voyage—the requirements of four times the tonnage, and of owning a vessel of a similar type, were removed.

(ix) Exclusion of the limitation of charter authorization for a single voyage. Through BR do Mar, the option to charter “by time on a single voyage” was removed, replaced by the expression “by time on one or more specific voyages.”

(x) Limiting the use in blockade of chartered vessels registered with the REB (Registro Especial Brasileiro) without a correlation of Brazilian tonnage: Paragraph 7 of Article 9 of the draft resolution establishes that vessels chartered bareboat and registered with the REB—without corresponding Brazilian tonnage—cannot be used to prove the existence or availability of a Brazilian-flagged vessel for blocking purposes.

(xi) Option of using the tonnage of vessels docked for up to 90 days: In order to adapt to the provisions of ANTAQ Resolution 6,439/2018, the draft resolution establishes that, during the docking period, vessels that were already part of the EBN fleet may remain approved for up to 90 days, without prejudice to ANTAQ's inspection.

Contributions must be made exclusively through the electronic form available on ANTAQ's website, and may be submitted until 11:59 p.m. on October 23, 2024. The date of the public hearing for discussions and clarification will be set afterwards.