Government issues ordinance about long-term cabotage contracts

On November 12, 2025, the Brazilian Ministry of Ports and Airports (“MPOR”) published Ordinance No. 663/2025 (the “Ordinance”). The Ordinance establishes the essential clauses of long-term transportation contracts for the purpose of authorizing the chartering of foreign vessels to operate exclusively in the transport of cargo in Brazilian cabotage navigation, under the provision established in Article 5, paragraph 1, item IV of Law No. 14,301/2022 (BR do Mar).

The Ordinance stipulates that a long-term transportation contract must include the following essential clauses, without prejudice to any other contractual provisions that may be necessary:

(1) Contracting parties: The Brazilian Shipping Company (Empresa Brasileira de Navegação – “EBN”) must be listed as the contracted carrier, and the cargo shipper as the contracting party for the transport service;

(2) Purpose: The exclusive, continuous, uninterrupted, and regular provision of cargo transport in cabotage, with the use of these vessels expressly prohibited for any other transport not specified in the contract;

(3) Identification of cargo: Description must include Mercosur Common Nomenclature (NCM), estimated volume, transport frequency, and ports of origin, destination, and any transshipment;

(4) Identification of the contracted vessels: main technical characteristics, valid certifications, flag registration data, and IMO hull identification;

(5) Environmental classification: An obligation to maintain the vessel’s classification as a “sustainable vessel,” pursuant to MPOR criteria;

(6) Vessel substitution: Options to substitute with a sustainable vessel, subject to prior authorization by the Brazilian National Agency for Waterway Transportation (“ANTAQ”) and proof of the infeasibility of operating the vessel(s) initially indicated in the contract;

(7) Minimum amount owed to the carrier: An obligation to pay a minimum amount established for the availability of the vessel and transport service, regardless of use and without any right to offset or to use the vessels in another period;

(8) Reimbursement to the shipper: An obligation to provide reimbursement in the event of unjustified failure to provide the transport service or to make the vessel available;

(9) Risk matrix: An allocation of risks and responsibilities between the parties;

(10) Contract term: A mandatory minimum term of five years, with the start date tied to the issuance of the charter authorization;

(11) Penalty for early termination by the shipper: A contractual fine in favor of the carrier;

(12) Penalty for early termination by the carrier: A contractual fine in favor of the shipper when termination results from an unjustified act;

(13) Adjustment and revision of amounts: Criteria applicable to the agreed amounts and to the updating of penalties;

(14) Mandatory communication to ANTAQ: An obligation to inform any facts that jeopardize contract performance, whether due to operational safety reasons or restrictions imposed by a Brazilian authority;

(15) Dispute resolution: A choice of court and, at the parties’ discretion, an arbitration clause, when applicable, with the possibility of including mediation as an initial dispute-resolution method.

The Ordinance also requires the EBN to submit a copy of the contract and its amendments to ANTAQ, along with periodic evidence of compliance with and maintenance of the established terms.

The Ordinance will enter into force on December 1, 2025.

*This content was produced with the participation of law clerk Rafael Pierotti.