As Brazil integrated further into global supply chains, the demand for import licences for a wide range of consumer and durable goods was doubling year-on-year.
INMETRO, the national standards and licensing agency, was struggling to cope with the sheer volume of requests for everything from household appliances to toys. Traders had to use different systems to complete a licence request, which would then be vetted manually by INMETRO officials. This was creating serious backlogs, with many requests taking up to 90 days to process. The absence of comprehensive risk management also increased the prospect that potentially harmful shipments might escape detection.
The agency had deployed temporary fixes to help mitigate these delays but recognised that a more sustainable solution was required.
Brazil’s transition to a more open economy has created a surge in demand for consumer and durable goods. The National Institute of Metrology, Quality and Technology (INMETRO), the standards agency responsible for issuing import licences, recognised the need for a sustainable solution to the backlogs this caused in processing applications. The Alliance worked with INMETRO and business to introduce modern risk management and IT systems, enabling approval of fully-compliant, low-risk applications within minutes of payment and a more streamlined appeals procedure.
What We Did
The project concentrated on two core objectives:
1. Introduction of a risk-based system to tackle the one-size-fits all licensing treatment of every shipment, regardless of risk profile
2. Integration of the licensing process into Brazil’s new Single Window, Portal Único, in close collaboration with the Secretariat of Foreign Trade of the Ministry of the Economy (SECEX), allowing traders a single point of contact.
These initiatives have had immediate, positive effects. The new system transformed the manual licence vetting process involving two, separate systems into one where fully compliant low-risk requests are automatically assessed and approved within minutes of payment confirmation. Also, when a licence is queried, it no longer returns to the back of the queue – now, it is considered a priority.
As a result, average approval times are projected to fall by up to 9.5 days, or 90%, per licence for high-volume imports, such as LED lamps, washing machines and refrigeration compressors.
Also, instead of having to obtain a permit for every shipment, a licence will typically cover multiple shipments valid for up to four years regardless of quantity. This is expected to translate into almost 37,000 fewer licence requests per year and an average cost reduction of US$ 47 per licence, representing total annual savings of US$ 1.4 million for business.
Combined with the introduction of a robust risk-management system, digitalisation freed up scarce INMETRO resources to focus on high-risk licences, enhancing the prospect of greater compliance and consumer protection. It also helped to build inter-agency cooperation and private sector trust in the licensing process, which encourages future collaboration.
The government can expect to generate more revenues from efficiency gains and higher throughput of licence applications, simultaneously affording greater safety for consumers. The longer term benefits to traders may be even greater than these results show as predictability and fewer delays may lead to reduced inventories and increased customer satisfaction. The reduced overheads may, in time, be passed on to consumers or reinvested in the business.
Project Structure: August 2018 – December 2021
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