Brazil’s Federal Revenue regulates use of blockchain in foreign trade

Brazil’s Federal Revenue regulates use of blockchain in foreign trade

Federal Revenue’s ordinance paves the way for the use of blockchain platform that will connect customs in Brazil, Paraguay, Argentina and Uruguay

Brazil’s Federal Revenue regulates use of blockchain in foreign trade

By Editorial Staff

A new ordinance of the Brazilian Federal Revenue (Internal Revenue Service) paves the way for the implementation of a joint blockchain-based system that will connect customs in Brazil, Uruguay, Argentina and Paraguay later this year, according to Cointelegraph. bConnect aims to ensure the veracity of the information of goods that are passing through customs. The project is expected to be launched later this year and there are prospects for expansion to other countries.

The ordinance regulates the use of blockchain technology in the customs regime of foreign trade, according to a publication in the Official Journal of the Union. Ordinance 879 of May 20, 2020, amends Normative Instruction 1639/2016, which deals with the application of a special customs procedure for temporary admission of goods under the support of Carnê ATA – a kind of passport of goods that allows the export and temporary import without taxes and without exemption from taxes of non-perishable goods for up to one year.

The publishing authorizes the sharing of data through a blockchain network:

“Data is authorized to be made available by providing partial or total replicas until December 31, 2020, a period in which the requesting body or entity must adopt the mechanism for sharing data through blockchain-based network or another one authorized by Cotec.” (NR).

IRS bets on blockchain for data immutability

The use of blockchain technology is critical to ensuring that the information entered in the export and import documents is not changed. One of the main features of blockchain is the immutability of its records. Technology even has the potential to replace digital certification in these projects, as each country has a different system and this often brings compatibility issues.

The IRS has so far issued two regulatory instructions regulating cryptoasset-related issues. The Normative Instructions 1.888 and 1.889 regulate the provision of information related to cryptocurrency transactions by both individuals and exchanges.