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Country Commercial Guides for FY 2000: Portugal Report prepared by U.S. Embassy Lisbon, released July 1999 Note*

VI. TRADE REGULATIONS AND STANDARDS

TRADE BARRIERS

The EU Customs Code (Code) was fully adopted in Portugal as of January 1, 1993. Special tariffs exist for tobacco, alcoholic beverages, petroleum and automotive vehicles. The Code adopts the directives of the General Agreement on Tariffs and Trade (GATT) including the amendments that resulted from the Uruguay Round of which Portugal is a signatory member.

Portugal uses the Harmonized Nomenclature and Classification System (HS) and applies import duties according to a maximum and minimum rate schedule. The minimum tariff schedule is applied to goods originating in countries entitled to the benefits of most-favored nation treatment (that is, members of the GATT and countries with which the EU has signed trade agreements) including the United States and most other countries.

Most import duties are levied on an ad valorem basis. However, specific tariffs and compound tariffs (the basis for weight may be gross, legal net or actual net weight) are also used for some imports. Please note that importers must pay the value-added tax (IVA) which ranges up to 17% in full at the time of importation from a non-EU country. Imports from EU countries only pay the IVA when a product is sold. This detail encourages many distributors to import indirectly from the U.S. via other EU countries.

CUSTOMS VALUATION

The customs value of imported goods is found by a set of six methods. The most commonly used customs value is the "transaction value method", which is the sales price in open market conditions when the product is sold in EU Customs Territory. If this method cannot be applied the others may be successively used, the sixth being a last resort. The "transaction value method" is based on the price actually paid by the importer to receive the merchandise in EU territory (no matter the port of entry).

The invoice price is generally used as the "transaction value method" of an import if it is clear that the price reflects market conditions and no doubt exists as to the accuracy of the details supplied. The transaction value method is usually the CIF price including any brokerage commissions and packing and excluding any duties payable in Portugal or EU countries.

IMPORT LICENSES

Because Portugal is a member of the EU, the majority of imported products enjoy liberal import procedures. However, there are certain products which require import licenses called import certificates for agriculture products and international import certificates for strategic/dual use products (products that may be used for both military and civilian purposes). For dual use products a certificate of delivery may also be required. There are also some licenses required for the import of textile products and for some industrial products from certain countries although not from the United States. Applications for import licenses should be submitted to the General Directorate of External Commerce. Tobacco, alcoholic beverages and automobiles are still subject to some import controls, generally resulting from bilateral agreements.

EXPORT CONTROLS

Since May 1988 Portugal has adopted EU directives regarding exportation. Presently, Portuguese exporters need to obtain an export declaration (this is a simplified procedure generally handled by a customs house broker) before they ship their merchandise. The export declaration is used for Portuguese Customs purposes but one copy should stay together with other export documentation.

In principle, the export declaration cannot be obtained without a receipt of deposit confirming that the merchandise is physically deposited in a customs area or an export warehouse. Export warehouses are approved by Customs authorities and generally facilitate the process of exporting. They do so by issuing export declarations as soon as the exporter informs the Customs authorities that the merchandise is available, and by making said merchandise available for Customs inspection.

Portuguese Customs regulations have recently approved the implementation of simplified export proceedings. This allows authorized exporters, exporters of perishables and express mail operators to export merchandise directly from their establishments. They are only required to present a commercial invoice to the Customs Authorities. The deposit of a guarantee is no longer required for exporters to have access to simplified export procedures.

IMPORT/EXPORT DOCUMENTATION

The following documents are required for ocean or air cargo shipments to Portugal: a bill of lading or an airway bill accompanied by commercial invoices.

Certain products require special documents: food products need a certificate of health in Portuguese; electric materials and construction equipment/machinery need a certificate of conformity to EU directives; grapes, alcoholic beverages and tobacco need a certificate of authenticity. Certificates of origin may also be required if the origin can in any way be attributed to a country subject to quantitative or other restrictions.

Bills of Lading and Airway Bills - Bills of lading and airway bills require no consular legalization. However, these documents should, if possible state the origin. "To order" bills of lading are acceptable if they bear the shipper's endorsement. Two copies of the document used in Portuguese or English are required.

Commercial Invoices - Portuguese Customs requires two copies of commercial invoices, but at least one additional copy should be provided to the importer. Commercial invoices should have an accurate and specific description of the goods with Free On Board (F.O.B.) value followed by an itemized description of expenses or Cost Insurance and Freight (C.I.F.) value. The invoice should indicate the country of origin. If the invoices are intended to certify the origin of the goods, they must have a certification by a chamber of commerce (or by U.S. Customs or port authorities).

In cases involving commodities that have undergone industrial transformation not representing full process of manufacture in the country of origin, or which have passed through free ports or zones, the respective commercial invoice shall bear notation issued by the Portuguese Consulate having jurisdiction in that area.

Certificate of Origin - Certificates of origin are not required on direct shipments (ocean, air or parcel post) or for goods transshipped via a waybill in which the origin is stated. For shipments not covered by a commercial invoice, a through bill of lading or air waybill stating the origin must be accompanied by a certificate of origin if the origin can be attributed to one country being subject to quantitative or any other restrictions.

Certificates of origin forms are obtainable from Portuguese consulates or authorized Chambers of Commerce. Certificates must be authenticated by an authorized Chamber of Commerce or the Portuguese consul, upon presentation of satisfactory evidence of origin, either at the port of original shipment or the port of transshipment.

TEMPORARY ENTRY

Foreign goods may enter Portuguese territory under temporary duty-free admission. Temporary entry can be allowed for goods in transit, for manufacturing, for temporary storage in bonded warehouses or for temporary importation. Generally, temporary entry of goods requires the deposit of a guarantee for import duties and VAT. However, in some cases, exemptions and partial guaranties can be made. In transit merchandise can be entered without guarantee by residents of the EU who make regular entries in transit or under carnet TIR, carnet ATA or a NATO 302 form. Guaranties are reimbursed when the merchandise leaves the territory of the EU. Professional materials, merchandise to be presented in exhibitions, teaching materials, medical/surgical and laboratory equipment, and other materials listed in the EU customs code can be temporarily imported duty-free under a carnet ATA. Temporary importation allows the merchandise to stay in the EU territory as foreign merchandise for a period of 24 months.

LABELING, MARKING REQUIREMENTS

Generally, all products must be marked according to EU directives.

Imported goods need to be marked with an indication of origin. The indication "made in" is no longer accepted in Portugal. All imported products sold directly to the public must be marketed with the label "Fabricado em" which is the Portuguese translation of "Made in". False indication of origin is prohibited.

Generally all products directly sold to the public must have their labels or markings translated into Portuguese especially the composition and usage instructions and should indicate clearly its validity and the name and address of the importer.

There may be special requirements for some products such as pharmaceuticals, detergents, tobacco, fertilizers, alcoholic beverages and foodstuffs containing preservatives and colorings. There are also special requirements for the packaging and labeling of dangerous or toxic products.

Jewelry and other articles of gold, silver or platinum must be assayed and hallmarked in Portugal by the assayer's office in Lisbon or Porto. The importation of these articles is limited to those firms or persons registered in the assayer's office.

There are no special requirements for marking the outside of cases for shipment to Portugal except that weights, when marked, should be in kilograms. Dangerous products must be marked according to the instructions of the UN.

PROHIBITED IMPORTS

As an EU country Portugal follows the EU Customs Code and has no prohibited imports. However, some products are subject to very strict controls such as strategic products, wildlife, hazardous articles, non-sport firearms and ammunition, etc.

STANDARDS (E.G. ISO 9000 USAGE)

Portugal uses NP EN ISO 9000 Standards, which are equivalent to ISO 9000 standards. American exporters must demonstrate through a certifying entity that the products offered meet equivalent quality standards. On July 2, 1983 the legal framework for the "Portuguese Quality System" was established to monitor quality methods in Portugal. The "Portuguese Quality System" is organized in three areas: metrology, normalization, and qualification. The IPQ (Portuguese Institute for Quality) certifies standards in Portugal and is one of the entities responsible for the "Portuguese Quality System".

FREE TRADE ZONES/WAREHOUSES

Madeira: The Madeira's International Business Center includes an Industrial Free Zone (41 licensed firms), a Financial Services Center (43 licensed bank branches), an International Services Center (2,833 licensed firms) and an International Shipping register (148 licensed firms). Madeira offers exemptions from corporate or individual income tax on licensed companies through the year 2011. It also offers grants of up to 100% of employee training costs and up to 50% of the cost of energy-saving changes in production measures. The Free Zone offers total exemption from customs duties on goods and raw materials imported into the zone; exemption from quotas on exports to the EU of goods produced in the zone; no payment of EU duties on local value-added; and no payment of EU duties on products incorporating EU raw materials and components. Foreign-owned firms have the same opportunities as domestic firms.

Azores: The Azores has established a Free Trade Zone on the island of Santa Maria with tax and financial incentives.

Bonded warehouses: Foreign products may be entered into Portugal and be stored in bonded warehouses duty-free for an unlimited period of time. There are five types of bonded warehouses depending on its public or private nature and whether its management is endorsed by the Customs authorities or by private entities (established in the territory of the EU). In some bonded warehouses it is possible to do some handling, assembling and or manufacturing of the stored goods.

SPECIAL IMPORT PROVISIONS

Advanced rulings on classification: Advanced rulings on tariff classifications for each type of product may be obtained upon request, in writing, to Customs at Porto or Lisbon. The request should include the name and address of the person who wants the ruling plus detailed descriptions, composition, applications of the product and as well as samples duly packed and labeled or photographs, plans or catalogs. The nomenclature on which the classification is desired, the suggested classification and other information necessary for an adequate ruling may also be supplied.

An advanced ruling may lose validity if it is no longer compatible with new regulations or with new interpretation of the nomenclature used and this information is given to the holder of the ruling. There may a postponement (of up to six months or the period of validity of any import certificate issued) of the loss of validity of an advanced ruling -- for duty determination purposes or calculation of quantity restrictions -- if import/export contracts have already been made or certificates of importation have been issued.

Entry and reexport: Foreign merchandise landed in Portugal must be declared for importation or temporary entry into the EU territory within a period of 45 days if landed by sea or 20 days if landed by air or from land. After arrival, if the merchandise cannot be immediately declared to customs because documentation is missing or because of any other reason, it will be stored ex-officio by the port authority in temporary storage customs warehouses, the cost of which is variable according to the nature of the merchandise. Any merchandise may be reshipped out of EU territory either before or after customs clearance. Normal reexportation is made when the merchandise is entered under one of the temporary entry regimes. Reexportation may be done after submission of a special customs declaration.

Samples and advertising materials: As an EU country and member of the Convention to Facilitate the Importation of Samples and Advertising Matter, Portugal grants duty free entry to giveaway samples properly labeled (except Tobacco and Matches), up to a duty value of 175 ECUs and up to a VAT (value added tax) value of the same amount.

Samples for which the duty is greater than these amounts may also be admitted duty free if they are intended for exhibitions, conventions or similar events, or other promotional purposes that justify the quantity being imported. The person making the declaration should provide justification for the larger quantity.

Samples are subject to the same documentation requirements that apply to ordinary commercial shipments and require a symbolic value for customs declaration purposes on the shipping documents or commercial invoices.

Catalogs, price lists, brochures, pamphlets may also be entered duty free under the same conditions as the samples, if the name of the manufacturer/seller is readily apparent.

Duty refund: Once goods have been cleared through customs, collected duties or excess payments may be refunded if at the moment of payment they were not due. Refund for undue and excess payments can be claimed within a period of three years. Refund of duties can also be obtained if a customs clearance declaration is cancelled after the payment of duties. If imported merchandise is defective or does not meet the contracted specifications and is refused and re-exported by the importer, he may request a duty refund within a period of 12 months.

There are other conditions, defined by the EU Committee, under which paid import duties may be refunded. All refunds must be requested by the interested parties.

Drawback: Importers may take advantage of "drawbacks" for all types of merchandise, except those subject to quantity restrictions or any agricultural leveling duty or similar imposition when the merchandise was cleared. Drawbacks allow the reimbursement of any duties paid on raw materials, parts, or components imported for the manufacture of a product in country for later exportation. This will be possible only if there are no restrictions to the exportation of the products that resulted from the imported merchandise and that the intended exportation took place.