Payment from Brazil

Question posted by Julia Brennan, on behalf of PLF International Ltd in CO12 4EN

We have a huge, blue chip customer in Brazil who purchased some equipment from us. We sent them an invoice for installation and commissioning, which they requested to be split into two invoices - one for goods, the other for services (labour). I then had to have the 'services' invoice legalised by the Brazilian Consulate, and duly returned it to them earlier this year. They have not paid this particular invoice.

They claim that bureaucracy is holding up this payment, despite their promise to pay it back in June, within 30 days. Is there any recourse I can take, or any other reader of this forum who have experience of such an issue.

All help will be gratefully received.

Posted:
Report inappropriate content

Jennie Rich, on behalf of UK Trade & Investment in SW1H.

Dear Julia,

Thank you for your question.

I have passed it onto my colleagues in the Commercial Section of the British Embassy in Sao Paulo. They are looking into it and will post a response in a couple of days.

Regards,

Jennie

Posted:
Report inappropriate content

Hi Julia,

It is not uncommon to have invoices held up by bureaucracy. However I'm assuming the unpaid invoice is for the services only and the equipment has been paid already.

Perhaps we can talk directly and see what the problem is. We'll get in touch with you later today and find out what can be done.

Regards,

Esteban

Posted:
Report inappropriate content

William Cawley, on behalf of Loudouns in EC4M.

Dear Julia
The splitting of the invoice could, and I emphasise "could", be a mechanism for local tax avoidance (import duty upon the value of goods). wonder: who decided, and upon what basis, was the invoice value split between the two? and was the split arbitrary?
You say the client is blue chip: I wonder have you exported/shipped to them before and whether they have always performed? Or is this your first dealings with them? If you have had past dealings, then follow up with the company and ask exactly what the problems are and when settlement may be expected etc. Accrued goodwill should be sufficient to resolve the issue. But if this is your first dealings with them, then I would not be too blinded by their reputation. You have provided equipment (and commissioning services, I understand), fulfilling your obligations under the contract. It is reasonable to expect to be paid; if not on time, then at least upon reasonable and transparent explanations and assurances as to when you shall be. If, as sometimes happens in these circumstances, big companies offer to smaller client companies the possibility of future business, I would politely decline it until paid under your first dealings - a precondition to future business is settlement of accrued outstandings.
I do not know what law and jurisdiction you have agreed in you sales contract. But, in future, I would recommend that try to ensure that you have English law and arbitration (arbitration, as the award will be easier and quicker to enforce in Brazil than an English High/County Court judgement).
If at all possible, avoid arbitration or litigation; a matter of last resort really. Try to negotiate a settlement of your outstanding invoice.
I think the services of the British Consulate could be very helpful -and Jennie's assistance could be valuable.

William

Posted:
Report inappropriate content

Firstly I suggest that you look on the internet at Business Basic in Brazil on www.journalofaccountancy.com, if they cannot resolve this problem the best advise is to register with PAC NET SERVICES they are a global solution and will be able to advise you on all financial matters to do with Brazil, they not they should be able to find someone to assist.
There e-mail is info@pacnetservice.com they have a telephone service in both Ireland and North America as follows call 353 (0) 61 714 360 or if in North America call +1 604 689 0399
There is also something called TAGLAW at taglaw.com run by Ernst and Young.

Brazil is difficult for payment, if no joy, please contact your local chamber of commerce and they may be able to sort out any difficulties with specific financial documentations.
I hope this is of some use, and good luck.
Rosa

Posted:
Report inappropriate content

Yuri Gricheno, on behalf of UK Trade & Investment Brazil in Brazil.

Dear Julia,

Thank you for your question. I’m sorry to hear you are having trouble in receiving payment from your client in Brazil. Unfortunately there are limited options in this situation.

Could you please get in touch with me at yuri.gricheno@fco.gov.uk . It would be good to discuss this issue with you. There may be a way we could assist.

We can also put you in touch with a legal advisor that is recommended by the British Embassy in Brazil who could advise you. However, any legal process is likely to be relatively slow.

Thank you for your attention,

Yuri Gricheno

Posted:
Report inappropriate content

Bryony Porcas, on behalf of Flo-FX in E1.

Hi Julia,

My name is Bryony and I work for a company called Flo-FX. We are able to beat corporate bank rates on foreign currency exchange. Due to the fact we are a trading name of Ebury Partners (whose turnover last year was in the region of £1bn), we have virtually no overheads and so can substantially undercut banks and competitors. We carry out all the necessary KYC checks in line with FCA regulations and maintain a fervent desire to ensure all our clients receive the fastest, most efficient service possible.

Please send me an email on b.porcas@flo-fx.com or visit our website at www.flo-fx.com for more information.

Posted:
Report inappropriate content

To respond to this question, please Login or Register

View all