The customs forfeiture penalty: how to defend yourself.
The loss of goods and vehicle, the CEJUL procedure and the arguments that reverse the assessment.

What the customs forfeiture penalty is — and why it is the most severe sanction

The forfeiture penalty is the definitive loss of goods, vehicles and currency seized in foreign-trade operations, decreed as the consequence of infractions that customs legislation classifies as damage to the Treasury. Unlike a fine — which reaches assets in cash — forfeiture takes the very thing away from the private party: the asset passes into the Federal Union’s ownership, without indemnity. That is why it is the gravest penalty in customs law, and the one that most affects the cash flow and operational continuity of an importer, exporter or carrier.

Its legal nature is mixed: repressive-compensatory. Repressive because it punishes an unlawful conduct; compensatory because it restores the damage caused to the Treasury. This dual character has an important practical consequence — customs forfeiture does not depend on a criminal conviction and is applied by the tax administration itself, within administrative proceedings, and not by a criminal judge. As will be seen further on, customs forfeiture and criminal forfeiture are distinct tracks that may even coexist over the same fact.

There is no single “Forfeiture Law”

One of the most frequent questions from those researching the topic — “what is the Forfeiture Law?” — starts from a mistaken premise. There is no autonomous law called the “Forfeiture Law”. The regime results from the sum of four regulatory layers:

• Decree-Law 37/1966, which structures customs control and defines, in art. 104, the situations of loss of the vehicle and, in art. 105, the nineteen situations (items I to XIX) of loss of the goods.
• Decree-Law 1.455/1976, which in art. 23 defines the infractions considered damage to the Treasury — punished with forfeiture — and in art. 24 equates to them the infractions of items I to VI of art. 104 of DL 37/1966.
• Law 14.651/2023, which reformed the procedure for applying and judging the forfeiture of goods, vehicle and currency, introducing the two-tier administrative review.
• The Customs Regulation (Decree 6.759/2009), which consolidates and details the matter (arts. 689, 691 and 695), including the conversion of forfeiture into a fine when the goods are not located.

Clarifying this is not pedantry: understanding that the footing is plural is the first step to locating, in the notice of assessment, which specific provision the tax authority invoked — and it is on that provision that the defense is built.

Customs forfeiture and “criminal forfeiture”: do not confuse them

One of the most common searches is for “criminal forfeiture penalty” — and here there is a confusion that should be dispelled with rigor, because it completely changes the forum, the procedure and the defense strategy. They are two distinct figures, with different legal footings:

• CUSTOMS forfeiture is the administrative sanction arising from customs legislation (DL 37/1966 and DL 1.455/1976). It has a mixed repressive-compensatory nature, does not depend on a criminal conviction and is applied by the Federal Revenue Service in administrative proceedings.
• CRIMINAL forfeiture/confiscation arises from art. 91 of the Criminal Code, as an effect of the conviction. It depends on a criminal sentence and is decreed by the criminal court, not by the tax administration.

The two figures are not to be confused and may coexist over the same fact: the same shipment may give rise, in the administrative sphere, to the customs forfeiture of the goods and the vehicle and, in the criminal sphere, to confiscation as an effect of a possible conviction for a crime. Treating one thing as if it were the other is a mistake that compromises the defense from the very first pleading.

Tax evasion in imports and smuggling: the crimes that orbit forfeiture

In the criminal field, two crimes usually appear alongside customs forfeiture. Descaminho (art. 334 of the Criminal Code) is evading, in whole or in part, the payment of the tax due on the import or export of permitted goods. Smuggling (art. 334-A of the Criminal Code) is importing or exporting prohibited goods — the two were separated into autonomous offenses by Law 13.008/2014. Two points of consolidated case law matter to the defense: descaminho is a formal crime, consummated regardless of the definitive assessment of the tax credit, and payment of the tax does not extinguish criminal liability; and the principle of insignificance applies up to the limit of BRL 20,000.00 (art. 20 of Law 10.522/2002), save for recidivism.

There is still a third track, proper to criminal law, with which customs forfeiture is not to be confused: the confiscation of assets in drug trafficking, based on art. 243 of the Constitution, the subject of Theme 647 of the STF (RE 638491), which admits the forfeiture of any asset seized as a result of trafficking, dispensing with habituality. It is a case-law line distinct from customs defense and should not be imported into forfeiture proceedings over goods or a vehicle for a customs infraction.

When it applies: the forfeiture situations and “goods in forfeiture”

When the market speaks of “goods in forfeiture”, it refers to the goods that were seized and submitted to the loss proceedings for falling within one of the legal situations — either because they were abandoned by the lapse of the clearance deadlines, or because the operation amounted to damage to the Treasury. Goods in forfeiture are not, in themselves, the result of a crime: they are the goods that customs legislation removes from circulation for a defect in the import, export or transit. Understanding which item the tax authority used to classify the goods is what defines the defense argument.

Loss of the goods — art. 105 of DL 37/1966

Art. 105 of Decree-Law 37/1966 lists nineteen situations (items I to XIX) of loss of the goods. Among the most recurrent in practice are goods concealed on board or in baggage (item III), goods with no entry in the manifest (item IV), the use of a forged or altered document (item VI), foreign goods displayed for sale without proof of regular import (item X), a false declaration of contents (item XII), goods transferred to a third party without payment of the taxes (item XIII) and the splitting of shipments to evade the tax (item XVI).

Loss of the vehicle — art. 104 of DL 37/1966

Art. 104 of DL 37/1966 deals with the loss of the vehicle (items I to VI). Typical situations are the carrying vehicle in an irregular situation as to the licensing rules, unloading or loading outside a licensed location, the vehicle carrying goods subject to forfeiture, where it belongs to the party responsible for the infraction (item V) and the land vehicle in transit of foreign goods diverted from the route with intent to violate, remove or substitute the cargo (item VI). It is precisely in the forfeiture of a vehicle that the strongest defense arguments — proportionality and good faith — are concentrated, addressed further on.

Damage to the Treasury — art. 23 of DL 1.455/1976

Art. 23 of Decree-Law 1.455/1976 defines the infractions considered damage to the Treasury, punished with forfeiture by its §1. Among others, it covers goods abandoned by the lapse of a deadline (deadlines of 90, 60 and 45 days depending on the situation of unloading, clearance or warehousing), baggage in a facility beyond the permitted term and, above all, item V (added by Law 10.637/2002): the concealment of the taxpayer, of the real seller, buyer or party responsible for the operation, by means of fraud or simulation, including the fraudulent interposition of third parties. Art. 24 equates to that list the infractions of items I to VI of art. 104 of DL 37/1966, punishing them with the same forfeiture penalty (a provision that today corresponds to §1 of art. 23).

When the goods are not located: conversion into a fine

There is a situation that changes the forum and the defense: when the goods are not located, have already been consumed or resold, the forfeiture is converted into a fine equivalent to the customs value (on import) or to the price stated in the invoice/document (on export). This is provided by art. 23, §3 of DL 1.455/1976 (with the wording of Law 12.350/2010), mirrored in art. 689, §1 of the Customs Regulation. As will be seen, this substitute fine does not follow the CEJUL procedure — it follows the tax litigation procedure (Decree 70.235/1972). In other words: identifying whether or not the goods were located is decisive to know where to present the defense.

Fraudulent interposition: the presumption that shifts the burden of proof

For importers and trading companies, the most sensitive forfeiture situation — and the one of greatest economic value — is the fraudulent interposition of third parties, provided in art. 23, item V, of DL 1.455/1976. It occurs when the party truly behind the operation — the real seller, buyer or party responsible — is concealed by means of fraud or simulation. The classic case is an import made in the name of a company that, in fact, operates on the account and order of another, hiding the true acquirer.

The rebuttable presumption of §2

What makes this situation so dangerous lies in §2 of art. 23 (added by Law 10.637/2002): fraudulent interposition is presumed when the origin, the availability and the transfer of the funds employed in the foreign-trade operation are not proven. This is a rebuttable presumption — but one that shifts the burden of proof. In practice, it is not the tax authority that must prove the fraud: it is the importer who must demonstrate, with documents, that the funds were lawful, its own and effectively belonged to it. Without that proof, the presumption operates against the assessed party.

Hence the centrality, in the defense, of the documentary reconstruction of the financial flow: exchange contracts, evidence of the origin of the funds, compatible financial capacity, bookkeeping and financial statements that support the operation. The argument is not to deny the presumption in the abstract — it is to rebut it with concrete proof that there was a regular origin, availability and transfer of the funds. It is technical work, combining customs law, accounting analysis and compliance documentation — and where the difference between a well-instructed defense and a generic one usually decides the outcome.

The defense procedure after Law 14.651/2023: the two-tier review at the CEJUL

The most important — and most current — transformation of forfeiture came with Law 14.651/2023 (of 08/23/2023). Before it, forfeiture was judged in a single instance: the decision of the Federal Revenue Service delegate ended the administrative discussion, with no appeal. The law replaced the single instance with a two-tier administrative review, in line with the international commitments to trade facilitation (WTO Trade Facilitation Agreement and the WCO Revised Kyoto Convention). It is the most relevant hook of the matter: much of the content circulating on the internet still describes the old, repealed procedure — and defending yourself under the wrong procedure is a real risk.

Who judges: the CEJUL, not the CARF

The judgment passed to the CEJUL — Center for the Judgment of Customs Penalties, a body of the Federal Revenue Service with national jurisdiction. Note a point that often causes confusion: the CEJUL is not the CARF. The CEJUL has exclusive competence over customs penalties (forfeiture and correlated fines); the CARF judges tax litigation (tax credit). They are different bodies and procedures. The CEJUL, worth noting for historical accuracy, was not created by Law 14.651/2023 — the law (art. 27-E of DL 1.455/1976) delegated the procedure to the Ministry of Finance, and the CEJUL was effectively created by Normative Ordinance MF No. 1.005/2023 and operationalized by RFB Ordinance No. 348/2023. Its structure has the ENAJ (National Judgment Team) in the first instance, with a monocratic judgment by a tax auditor, and the Appeals Chambers in the second instance.

The deadlines that cannot be missed

The procedure is in arts. 27-A to 27-E of DL 1.455/1976, added by Law 14.651/2023. Once the notification is made, a challenge is due within 20 days of notice (art. 27-A); whoever does not challenge is deemed in default (art. 27-C, §1). If the first-instance decision is unfavorable, an appeal to the second instance is due within 20 days of notice (art. 27-D). The first-instance decision becomes final once the deadline lapses without an appeal, as does the second-instance decision. The notification methods (personal, postal, electronic and by public notice) have their own counting rules — by public notice or electronic means, for example, notice is usually deemed served 15 days after publication/delivery — and there is no order of preference among them. Checking when and how notice occurred is the first technical verification of the defense, because it is from that moment that the deadline runs.

Early disposal of the asset — a risk to monitor

A practical warning: the goods or the vehicle may be disposed of before the end of the proceedings. The legislation authorizes the sale/disposal after the declaration of default or after an unfavorable first-instance decision, even while judicial review is pending — and, in the case of perishable, self-moving, flammable, explosive goods or those requiring special storage, already after the seizure. This means that missing the challenge deadline not only weakens the defense: it may enable the disposal of the asset. Monitoring this risk is part of the strategy — and one of the reasons, in many cases, to act in parallel in the judicial sphere.

The evolution of the law: from DL 37/1966 to the two-tier review of 2023

Understanding where the forfeiture regime comes from helps to read the notice of assessment and to separate what is a rule in force from what is noise. The construction took place in layers, over almost six decades:

A terminology caution that separates a technical defense from a generic one is still worth noting: §§ 1 to 4 of art. 27 of DL 1.455/1976 were repealed by Law 14.651/2023, which moved the challenge and appeal procedure to the new arts. 27-A to 27-F. Citing the old procedure, relying on the repealed paragraphs, is a mistake that appears in many pleading templates — and one that a careful defense avoids. For assessments formalized up to the entry into force of the law (08/24/2023), there is a transition rule: competence remains governed by the prior legislation.

Forfeiture of a vehicle: proportionality, good faith and regularization

The forfeiture of a vehicle — truck, bus, automobile — is where case law has built the most solid defense arguments. Those seeking to “regularize a vehicle under the forfeiture penalty”, often in a context of transporting foreign goods seized in transit between states, find here the argumentative core. And it rests on two pillars: the owner’s responsibility (good faith) and proportionality.

The owner’s good faith — Precedent 138 of the extinct TFR

The starting point is Precedent 138 of the extinct Federal Court of Appeals (TFR): “The forfeiture penalty of a vehicle used in smuggling or descaminho is only justified where the responsibility of its owner in the commission of the unlawful act is demonstrated in regular proceedings.” The logic is direct: it is not enough that the vehicle transported the irregular cargo — the tax authority must demonstrate that the owner contributed to the unlawful act, with knowledge of what was happening. It is the basis for the defense of the good-faith owner, of the carrier who was unaware of the cargo and of the vehicle under a lease or fiduciary sale, whose owner did not take part in the operation.

Proportionality — the value of the vehicle x that of the cargo

The second pillar is proportionality. The case law of the STJ and of the Federal Regional Courts has consolidated that the forfeiture of the vehicle presupposes two concurrent requirements: (a) proof that the owner contributed to the unlawful act and (b) a relationship of proportionality between the value of the vehicle and that of the transported goods. Where there is a flagrant disproportion — a truck of a value far above that of the seized cargo — the application of forfeiture becomes abusive and may be set aside for reasonableness. It is one of the most effective arguments to recover the asset, both in the administrative challenge and in the judicial channel.

Where to present the defense — and when conversion into a fine applies

An effective defense begins by getting the forum right. Not every forfeiture assessment follows the same path, and filing the pleading under the wrong procedure costs precious time. Three typical situations require distinct treatment:

• Forfeiture with located goods: it follows the CEJUL procedure (challenge in 20 days + appeal in 20 days), in the customs administrative sphere.
• Substitute fine (goods not located, consumed or resold): because the forfeiture was converted into a fine (art. 23, §3 of DL 1.455/1976), the defense follows the tax litigation procedure of Decree 70.235/1972 — the CARF procedure — and not the CEJUL.
• Carrier’s fine in road transport: it has its own procedure, with the vehicle retained; if the fine is not paid within the legal deadline, it is converted into forfeiture of the vehicle.

In any scenario, it is worth assessing the concurrent judicial channel — writ of mandamus or annulment action — above all to seek the release of the asset upon guarantee and to raise the proportionality argument when the administrative channel does not accept it. Administrative and judicial are not mutually exclusive: well coordinated, they reinforce each other.

Relief and conversion: the mechanism of art. 739 of the Customs Regulation

There is, in art. 739 of the Customs Regulation (Decree 6.759/2009), a mechanism whereby, in specific situations provided in the rule, it is possible to relieve the forfeiture upon payment equivalent to twice the fine originally applicable. It is a valve that, where applicable, allows the interested party to restore the situation without the definitive loss of the asset. Here the caution of a good technician applies: the list of situations in which relief is admitted must be checked in the full text of the provision, case by case — it does not apply indiscriminately. The TaxUp team assesses, in each assessment, whether the relief of art. 739 is an available route.

Under-invoicing: the distinction that may rule out forfeiture

A high-value defense argument, especially for importers, concerns under-invoicing. The defense sustains that “pure” under-invoicing — a mere inexact declaration of price, without documentary fraud — does not give rise to forfeiture, but rather to the assessment of the tax difference and a fine; forfeiture would only apply where the under-invoicing is qualified by material or ideological falsity, that is, where there is documentary fraud that goes beyond the price. The distinction between “isolated under-invoicing” and “under-invoicing qualified by fraud” is recognized by the case law of the STJ and the TRFs. The TaxUp team sustains this argument based on the concrete analysis of each assessment — confirming, case by case, the classification and applicable case law before raising it, and without turning into a rule what depends on the facts of each operation.

How the firm acts — from the assessment to the reversal

Immediate response to the notice of assessment

The TaxUp team’s first move, faced with a forfeiture assessment, is an urgent analysis: verifying the date and the method of notice (from which the 20-day deadline runs), identifying exactly which item of art. 104 or 105 of DL 37/1966, or of art. 23 of DL 1.455/1976, supports the assessment, and mapping whether the goods were located — which defines the forum. From this diagnosis comes the strategy: challenge before the CEJUL, defense in the tax litigation channel or concurrent judicial action.

Evidentiary instruction and arguments

The most determinant front is the evidence. In cases of fraudulent interposition, the firm reconstructs the origin, availability and transfer of the funds to rebut the presumption of art. 23, §2. In the forfeiture of a vehicle, it instructs the arguments of the owner’s good faith (Precedent 138/TFR) and proportionality. Where applicable, it assesses the relief of art. 739 of the Customs Regulation and the under-invoicing distinction — always from the concrete facts, not from generic formulas.

Challenge, appeal and judicial channel

On the procedural plane, the work is to conduct the challenge at the 1st instance (ENAJ) and, if necessary, the appeal to the Appeals Chambers, within the 20-day deadlines. In parallel, when the case so recommends, the firm handles the writ of mandamus or the annulment action — especially to obtain the release of the asset upon guarantee and to raise the proportionality that the administrative channel does not always accept. It is the coordination between the two spheres that usually recovers the asset without halting the operation.

Prevention: before forfeiture happens

The best defense is not needing one. For importers and trading companies, the firm acts preventively on the documentary structuring that shields the operation against the presumption of fraudulent interposition — proof of the origin of the funds, consistent contracts, customs compliance — and on the correct classification and valuation, which avoid an assessment for under-invoicing. This front connects forfeiture to the neighboring pieces of the Customs Law pillar: from customs clearance and the DUIMP to the Authorized Economic Operator (OEA), topics in which the consistency of the declared data is the first line of protection against an assessment.