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08 April 2020
The COVID-19 outbreak has been affecting supply chains worldwide and significantly impacting global trade and the maritime industry, including the offshore sector.
As Brazil is a large country with more than 210 million people, whose economy depends on the export of commodities such as soy, sugar, corn, animal protein, iron ore and oil and gas among other things, the continuity of its international trade and shipping is paramount in times such as this where COVID-19 is imposing quarantine on people and businesses.
On 18 March 2020 Brazil closed its land borders prohibiting entry by foreign nationals. Further, following the requests of politicians and the health authorities, many individuals have started working from home and many businesses have been closed. As Brazil is a vast country, the adoption of measures has taken place at different times in accordance with the spread of the virus.
Brazil is a federation, and the Federal Constitution grants specific regulative and enforcement powers to the federal government, states and municipalities. Due to the spread of COVID-19, the federal government, states and municipalities have taken different measures to combat the pandemic, including restrictions to travel by air, sea and land on different scales.
These conflicting rules have led to an overlapping of normative acts by different authorities and a constant debate regarding the continuance or temporary closure of different services, including commodities industries, navigation and offshore activities.
On 7 February 2020 the federal government enacted Law 13.979/2020 (regulated by Federal Decree 10,282 of 20 March 2020 and Federal Decree 10,292 of 25 March 2020). The law establishes measures to be adopted to fight COVID-19. It allows the authorities to adopt a list of measures, in accordance with their constitutional powers, including placing exceptional and temporary restriction on the use of roads, ports and airports. The law expressly states that, if any measure is taken, public services and essential activities must be ensured.
However, states and municipalities have also taken actions of their own, some of them in direct conflict with the abovementioned federal law thus seeming to overstep the powers granted to them by the Federal Constitution. For example, one municipality has ordered complete quarantine and decided to close all industry and commerce, including the offshore industry, which has the potential to create an economic catastrophe. Some states have also imposed the closure of airports and roads, which can lead to severe logistical issues, including difficulties for crew to navigate, embark and disembark in port areas and cargo supplying.
The National Agency for Ports and Navigation (ANTAQ) introduced an important measure on 25 March 2020. Having examined the federal laws on COVID-19 and the conflicting decrees issued by states and municipalities, ANTAQ published Resolution 7,644, which determined the maintenance of the operation of vessels and port facilities and prohibited any action that:
The need to quarantine crew has also been discussed widely in Brazil. On 25 March 2020 the Ministry of Infrastructure, through the National Commission of Port Authorities (CONAPORTOS), issued Resolution 2 with guidelines to ports. While no direct restriction on international commercial navigation was imposed, the resolution instructs ports to demand cargo vessels coming from overseas to berth without disembarking crew for up to 15 days from the last exit from a foreign port, except disembarkations that are fundamental to the operation. The resolution also suspends new boarding on cruise ships that are in Brazilian waters and imposes restrictions on the operation and disembarkation of individuals from cruise ships from overseas.
Moreover, on 26 March 2020 Ordinance 47 of the chief of state's office was issued, which restricts the disembarkation of foreign nationals through waterways for 30 days, with a few exceptions.
On 2 April 2020 ANTAQ published Resolution 7653/2020 which reviews and consolidates its previous measures, revoking Resolution 7644/2020 but again prohibiting any action that restricts the movement of workers on essential services or the circulation of cargo of necessary supplies. The new resolution also establishes restrictions on embarking symptomatic crewmembers and passengers and safety measures to be adopted by port installations and companies working in waterway transport.
The maritime authorities and the Admiralty Court, responsible for, among other functions, maintaining the registration of naval property, mortgages on Brazilian vessels and the Brazilian Special Registry, in addition to deciding on accidents and navigation facts, recently published a set of normative acts and ordinances on COVID-19. While they acknowledge the need to ensure safety amid the pandemic, their services are fundamental and therefore must continue, with the adoption of measures for the protection of users and workers.
It seems that the Brazilian authorities understand the utmost importance of maintaining trade and international commerce, which includes maritime transport and the port and domestic logistics related thereto.
However, as the COVID-19 pandemic involves different authorities at different levels of Brazil's political system (ie, federal, state and municipal) it seems that better coordination must be adopted by such authorities to ensure an efficient set of regulations.
As new regulations to handle the COVID-19 crisis have been issued on a daily basis, it is paramount that owners, charterers, traders and port operators keep a close eye on legal developments.
For further information on this topic please contact Godofredo Mendes Vianna or Livia Sanches Sancio at Kincaid | Mendes Vianna Advogados by telephone (+55 21 2276 6200) or email (firstname.lastname@example.org or email@example.com). The Kincaid | Mendes Vianna Advogados website can be accessed at www.kincaid.com.br.
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