Brazil’s leather industry counts the cost of duty evasion
Since the introduction of the 9% duty on wet blue exports to non-Mercosur countries at the end of last year, stories have abounded in the Brazilian press on how the duty is being flouted.
Though nobody has yet been prosecuted, two types of fraud are suspected, with wet blue being passed off as crust, or being exported via the Mercorsur states Uruguay and Paraguay.
The figures tell the story: Exports of wet blue to the two countries soared by 116% compared with the first two months of 2000, reaching 1.05 million units. According to Secex, an estimated 500,000 wet blue have so far been exported illegally in this way.
Comments Jose Roberto Scarabel, president of CICB - Centre for the Brazilian Tanning Industry: "This is one more ‘competitive inequality’ that the Brazilian leather trade must now suffer, adding to those which have already been imposed by legal means. Sadly, companies which prefer to leave ethics and lawfulness aside currently have the advantage over those which stick to honest practices, and which are now being further penalised by the market instability that the illegal practices have brought."
Scarabel has suggested that the Federal Police looks into each reported case, so that the offending companies can be brought to book.
