Cargill Inc.'s recent victory in a customs court case sets an important precedent for Brazil’s exporters, shielding them from potentially huge tax fines.
Brazil’s revenue service appeals court, in a unanimous decision, upheld the legality of Cargill’s export processes. The court rejected the revenue service’s $2.6 billion fine, that equaled the total of the company’s exports for 2013.
The revenue service had fined U.S.-based Cargill’s Brazilian unit asserting that the company’s customs export structure was fraudulent. The tax authority alleged that the company didn’t declare the final destination of its exports.
Cargill sold futures contracts via an offshore subsidiary who...