What is a forfeiture penalty?
The penalty of forfeiture is the most severe sanction under Brazilian customs legislation, in which a certain good is seized by the tax authorities and its ownership is transferred to the state. It is applied in cases of serious irregularities such as smuggling, embezzlement, falsification of documents and other illicit acts.

What has changed?
Previously, the Brazilian Federal Revenue (RFB) determined the penalties of forfeiture through a tax process consisting of a single instance of judgment. Thus, upon receipt of the
'Notice of Infraction and the Tax Custody and Seizure Term, the importer was only allowed a single opportunity to defend himself: challenging the Notice of Infraction.

With the new Law 14,651/2023, published on August 24, 2023, the penalty of forfeiture of goods, vehicles and currency will operate with a double instance of appeal. The Customs Penalty Judgment Center (Cejul), composed of tax auditors from the RFB and with national jurisdiction, was established to judge these cases.

According to the legislation, after an unfavorable decision in the first instance, an appeal must be filed within 20 days. Filing an appeal, however, will not prevent the goods from being sent to forfeiture after the first instance decision.

What are the impacts of the new rules?
By implementing the double instance mechanism, Brazil is aligning itself with the guidelines of the World Trade Organization (WTO) and the Revised Kyoto Convention (RKC) of the World Customs Organization (WCO) - international treaties to which the country is a signatory.

With the establishment of this new body, those affected will have another opportunity to have their arguments heard. Furthermore, the new legislation will lead to greater uniformity in decisions, as the summaries of rulings will be published on the internet, forming administrative jurisprudence of general knowledge.