WT/TPR/S/75 Trade Policy Review
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) INTRODUCTION
1. The tariff is Brazil's main instrument of border protection.  The tariff structure has been
largely determined by the programme of c onvergence towards MERCOSUR's Common External
Tariff.  Since Brazil's last Review in 1996, the average MFN tariff has risen to 13.7% but dispersion
decreased.  This reflects a general three percentage point increase in 1997, to be eliminated by end2000.  The tariff shows escalation, providing higher levels of effective protection than is indicated by
the nominal tariff.  A more uniform tariff structure would thus enhance resource allocation.  Brazil
has bound its entire tariff, mostly at ceiling levels.
2. Despite an increasing reliance on tariffs, non-tariff measures remain important:  a
non-automatic import licensing system is in place, while import prohibitions are applied for health,sanitary, environmental, and security reasons.  Restrictions on import financing introduced in 1997
were abolished in 1999.  Brazil is an active user of anti-dumping measures;  some 45 measures are in
place.
3. Steps have been taken to offset the existing anti-export bias created by the tariff structure and,
until recently, an overvalued exchange rate.  Market access has been enhanced through thestreamlining of import procedures.  Exports have been supported through promotion programmes and
subsidies.  Although export taxes apply to all products, in practice they are generally zero rated.
4. Regional programmes are widely used, mainly in the form of tax incentives;  there are no
estimates of their net benefits.  During the period under review, some programmes were subject to
local-content and export-balancing requirements (e.g. the measures taken in support of the automotive
sector).  Price deregulation and privatization have continued, especially in the services sector.  The
deepening of this process has highlighted the importance of competition policy, which is beingapplied more actively.  Brazil has introduced new legislation on intellectual property rights, and
important enforcement efforts have taken place.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Procedures
5. Individuals and legal entities engaging in foreign trade generally need to be registered with
the Secretariat of Foreign Trade (SECEX) in the single Register of Importers and Exporters.1
Operators foreign trade, with some exceptions2, are required to use the Integrated Foreign Trade
System (SISCOMEX), introduced on 1 January 1997.  SISCOMEX is a computerized system through
which customs clearance, import licensing, and foreign exchange control regarding import operations
are processed.3
6. An import declaration (ID) processed through SISCOMEX, for which there is a US$5 fee,
must be submitted to the customs authorities with the following documents:  import licence, which is
required for all imports (see below);  a commercial invoice;  and a pro forma invoice indicating the
f.o.b. price, unit price, gross and net weight, itemized freight and all other expenses, and total c.i.f.
value.  The invoice must be accompanied by a published list of prices or a sales catalogue;  if these
                                                     
1 Secex Directive No. 7, 20 October 1998.
2 These include government agencies and mixed (public and private) capital companies with
government-controlled import budgets.
3 Directive MF/MICT No. 291, 1996.Brazil WT/TPR/S/75
Page 27
are unavailable, a statement must be included indi cating that no catalogues or price lists are published
for the merchandise.4  A certificate of origin is mandatory only if origin information does not appear
on the commercial invoice.  A sanitary certificate, which should be notarized and legalized by a
consul, is required for shipments of products that are capable of transmitting diseases, including
animals, animal products and byproducts, seeds, and plants.  Reportedly customs clearance generally
can be completed in five to seven days but if documentation is not accurate and complete it may takeup to four weeks.
5
7. Importers are required to use the Simplified Import Declaration (SID) for products to be used
in exhibitions and trade fairs, as samples from international companies, and for goods imported via
regular and express mail.  The SID is also used when goods have to be dispatched quickly from
Customs, for instance in the case of perishables, goods imported in case of emergency, and goodsimported in bulk.  The SID is not processed through the SISCOMEX.
6  Imports of soft drinks,
flammables, airplanes, armaments, dangerous substances, chlorinated pesticides, insecticides, other
agricultural chemicals, and animal foodstuffs require special documentation.7
8. As of 1 January 1997, customs clearance is undertaken through three channels:  green,
yellow, or red.8  Clearance for goods that go through the green channel is automatic.  Through the
yellow channel, the import declaration is checked and, if no irregularities are found, clearance and
delivery of the good are authorized.  Goods that go through the red channel are cleared and delivered
to the importer following examination of the documents and physical verification.  In 1998, a fourth,
grey channel, was established.  In this case, goods are cleared only after examination of the import
declaration, physical verification, and preliminary analysis of the customs value.9
9. The authorities note that around 70% of all imports are processed through the green channel,
20% through the yellow channel, 8% through the red channel, and 2% through the grey channel.Goods cleared through the red and yellow channels are chosen at random.  The criteria used to
determine which goods should the cleared through the grey channel relate to the importer's
compliance record, the country of origin of the goods (e.g. from countries considered tax havens), and
the import regime (e.g. drawback system, free trade zones).
10. An importer may leave goods in the customs warehouse for up to one year, which may be
extended for two subsequent periods of one year each.
10  Warehousing charges are assessed on the full
value of customs duties or on the commercial value of duty-free goods;  generally, charges range
between 0% and 15% of the value.
11. Import shipments must be insured by foreign or domestic companies established in Brazil and
policies denominated in local currency.
(a) Transit
12. Goods in transit are exempt from import duties;  they may be stored for a maximum of three
months for perishables and one year for other merchandise.  Goods in transit must enter through
specific Brazilian ports, which have been designated as transit zones for neighbouring countries.
                                                     
4 Bureau of National Affairs, Inc. (1999).
5 Dun & Bradstreet, (1999).
6 U.S. Department of Commerce (1999a).
7 Bureau of National Affairs, Inc. (1999).
8 Normative Instruction SRF No. 69, 10 December 1996.
9 Normative Instruction SRF No. 16, 16 February 1998.
10 U.S. Department of Commerce (1999a).WT/TPR/S/75 Trade Policy Review
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These ports are:  Belém for Peru and Bolivia;  Corumbá for Bolivia;  Manaus for Ecuador;  Paranaguá
for Paraguay;  Porto Velho for Bolivia;  and Santos for Bolivia and Paraguay.  Other seaports or
airports may also be used as transit zones for neighbouring countries, provided federal customs
officials are stationed there, even if they have no special facilities for transit shipments.11
(b) Preshipment inspection
13. Brazil does not use preshipment inspection except for certain agricultural products
(section (viii)(b)).  Brazil notified to the WTO that the legislation bringing the Agreement on
Preshipment Inspection into force was Decree No. 1.355 of 30 December 1994, which incorporated
the WTO Agreements into the Brazilian legal system.12
(c) Import payments and exchange controls
14. On 30 October 1999, Brazil eliminated a restriction on import financing, which it imposed
in 1997.13  Under this measure, for operations with payment periods up to 180 days, importers had to
purchase foreign exchange to pay for the shipment upon importation or 180 days in advance, rather
than when payment was due under the contract.  For payment periods between 181 and 360 days,
exchange transactions for future liquidation had to be effected between the first and the 180th day
subsequent to the day of registration of the import declarations.  If the payment term was greater than360 days, the operation was characterized as long-term import financing registered at the Central
Bank, with no need for exchange contracting for future liquidation.
14
15. Exemptions to this measure included imports of petroleum and oil derivatives, goods
qualified for the drawback regime, and individual shipments valued at under US$10,000.  Payments
for basic food imports to be used to meet occasional supply shortages were also exempt from the
obligation of contracting exchange for future liquidation.15  This mechanism was utilized in the final
quarter of 1998 in foreign acquisitions of rice.16  The requirement was less strict on imports from the
Market of the Southern Cone (MERCOSUR), Bolivia, and Chile for which shipments of up to
US$40,000 were exempt.17
(ii) Customs valuation and rules of origin
16. Brazil is applying the WTO Customs Valuation Agreement.  As a developing country, Brazil
has kept reservations relating to certain methods  of valuation (paragraphs  3 and 4 of Annex III of
WTO Customs Valuation Agreement).18
17. Customs value is generally the transaction value;  if the application of this method of
valuation is impossible, the value is established in accordance with the substitute methods provided
                                                     
11 Dun & Bradstreet (1999).
12 WTO document G/PSI/N/Add.5, 3 February 1997.
13 Provisional Measure No. 1.569, 25 March 1997.
14 Central Bank (1997).
15 Central Bank Circular No. 2.840, 23 September 1998, and Central Bank Circular No. 2.730,
13 January 1996.
16 Ministry of Finance Directives No. 221, 27 August 1998, and No. 242, 14 September 1998 (Central
Bank, 1998).
17 U.S. Department of Commerce (1999b).
18 WTO document G/VAL/2/Rev.10/Corr.2, 26 April 2000.Brazil WT/TPR/S/75
Page 29
for in Articles 2, 3, 5, 6 and 7 of the WTO Agreement on Customs Valuation.19  The authorities stated
that Brazil does not use minimum import prices for customs valuation purposes.
18. On 17 February 1998, Brazil adopted Decree No. 2.498, which deals with the application of
the WTO Agreement on Customs Valuation and establishes the general rules for customs valuation in
Brazil.  This Decree replaced the customs valuation legislation, which had been notified in the GATT
Committee on Customs Valuation.  The new Decree is complemented by Ministerial Order No. 28/98of 16 February 1998, implementing the Decree, and by the Federal Revenue Administration's
Normative Instructions Nos. 16, 17, and 18 of 16 February 1998.
20
19. In accordance with Decree No. 2.498, the customs value of any imported good may be
verified on a selective basis, at the time of impor t clearance or in a post-importation customs review.21
Although the legislation does not specify criteria to determine which goods should be subject to
control, in general, customs values are checked if there is suspicion of a fraudulent declaration of
value, considering the historical value of the same or a similar import.22  The authorities noted that the
value of only some 2% of all imports is checked (i.e. customs clearance through the grey channel).  If
goods are selected for customs value verification, the importer must present a customs value
declaration with the supporting documents.
20. Goods subject to customs value control may be released from customs only upon the
provision of a guarantee when the customs value is lower than a value considered reasonable for
identical or similar goods, or cannot be determined at the moment of the customs clearance because
the final price payable or the information required for the use of an appropriate valuation method
depends on factors to be implemented after importation.23  The Secretariat of Federal Revenue (SRF),
under the Ministry of Finance, establishes the guarantee based on the difference between the amount
of import duties collected and the amount to which the goods may be liable.
21. In addition, imports of merchandise that originated, was acquired, or was processed in
specific countries or regions considered by the Brazilian authorities as markets that offer fiscal
incentives, were subjected to control of the declared customs value, initially between 1 October 1998
and 31 December 1998.24  This measure was prolonged until 31 March 1999.25  Imports of toys
classified under positions NCM 9501, 9502 and 9503 were also subject to control of declared customsvalue.
26
22. Brazilian legislation contains specific provisions regarding the customs valuation of goods
invoiced by a single global price.27  The importer must declare the value of each good separately, as
well as the criteria used to determine individual values.  If the customs authorities are able to prove
that the prorated values have been calculated with the objective of reducing the taxes to which the
                                                     
19 Normative Instruction SRF No. 16/98, Article 1.1, 17 February 1998.
20 WTO document G/VAL/N/1/BRA/2, 30 November 1998.
21 Art. 2, Decree No. 2.498, 13 February 1998;  and Art. 3 Normative Instruction No. 16,
16 February 1998.
22 Art. 20, Normative Instruction SRF No. 16/98;  Art. 1, Portaria MF No. 28, 16 February 1998;
Decree No. 2.498, 13 February 1998;  and Normative Instruction SRF No. 75, 24 July 1998.
23 Art. 12, Decree No. 2.498, 13 February 1998.
24 Normative Instruction SRF No. 116, 1 October 1998.
25 Normative Instruction SRF No. 147, 14 December 1998.
26 Normative Instruction SRF No. 119, 9 October 1998 and Normative Instruction SRF No. 147,
14 December 1998.
27 Normative Instruction SRF No. 139, 26 November 1998.WT/TPR/S/75 Trade Policy Review
Page 30
importer is liable, or preventing the imposition of safeguard measures, anti-dumping, or
countervailing duties, the declared value is rejected and the value is determined by the authorities.28
23. Brazilian legislation also has provisions regard ing the treatment of interest charges in the
customs value of imported goods, and the valuation of carrier media bearing software for data
processing equipment.29  However, the implementation of this legislation was apparently still under
examination in May 2000.30  Charges for interest under a financing arrangement entered into by the
importer and relating to the purchase of imported goods are not regarded as part of the customs
value.31  The same legislation provides for the customs value of carrier media containing data or
instructions for data processing equipment to be de termined taking into account only the cost or value
of the carrier medium itself, provided that the cost or  value of the data or instructions is distinguished
from the cost or the value of the carrier medium on the document of acquisition.32  Brazil maintained
special provisions for the valuation of motor vehicles.33
24. Appeals concerning the valuation of imported merchandise are heard by the Secretariat of
Federal Revenue (SRF).  If the final decision is against the importer, a fine amounting to between
50% and 100% of the difference between the declared value and the verified value must be paid by
the importer.34
25. The European Union requested consultati ons on 14 October 1999, under WTO's dispute
settlement mechanism, regarding Brazil's establis hment of minimum prices, which were allegedly
systematically applied at the border, either to obtain  an import licence or as the basis to calculate the
customs value.35  The United States joined this consultation on 27 October 1999.36  Consultations with
both partners took place before the end of 1999.  The United States announced in May 2000 that it
would start consultations with Brazil regarding the imposition of reference prices for some textile
products.37
(a) Rules of origin
26. Brazil does not have non-preferential rules of origin.38  Preferential rules of origin apply to
Latin American Integration Associat ion (LAIA) and MERCOSUR countries.39  I n  g e n e r a l ,
MERCOSUR origin requires substantial transformation or, when this criterion is not met, that the
c.i.f. value of inputs from third countries does not exceed 40% of the f.o.b. value of the product inquestion.  Specific provisions apply to chemicals, steel, telecommunications, and informatics
products.
27. Since 1996, new preferential rules of origin we re adopted in the context of MERCOSUR's
free-trade agreements with Chile and Bolivia (Chapter II).  In the first case, rules of origin varied
                                                     
28 Art. 3, Normative Instruction SRF No. 139, 26 November 1998.
29 Decree No. 2498, Articles 4 and 5, 16 February 1998.
30 See also WTO document G/VAL/W/5/Rev.5, 3 November and GATT document
VAL/2/Rev.2/Add.3, 11 May 1997.
31 Decree No. 2.498, Article 19, 16 February 1998.
32 Decree No. 2.498, Article 20, 16 February 1998.
33 WTO (1997a), section III(1)(ii).
34 Bureau of National Affairs, Inc. (1999).
35 WTO document WT/DS183/1, 25 October 1999.
36 WTO document WT/DS183/2, 1 November 1999.
37 BridgeNews , 2 May 2000.
38 WTO document G/RO/N14, 2 December 1996.
39 WTO document G/RO/N12, 1 October 1996.Brazil WT/TPR/S/75
Page 31
according to product;  the criteria included substantial transformation, change in tariff classification,
and regional content (i.e. of 40% or 60%).40
(iii) Tariffs
(a) Structure
28. The Brazilian applied tariff has 9,371 tariff lines at the eight-digit level, comprising rates of
0% to 35%.  All tariffs are ad valorem , levied on the c.i.f. value of the import, with the exception of
some telecommunication goods for which the higher of an ad valorem  or specific rate applies
(Table III.1).
Table III.1
Tariffs on telecommunication goods, 2000-06
Year 2000 2001 2002 2003 2004 2005 2006
Product (HS)
Automatic data processing machines and units thereof (HS lines 8471.49.12 and 8471.50.20)
Ad valorem  d u t y  ( % ) 2 42 2 2 0 1 81 61 41 2
Specific duty (US$) 3,250 3,000 2,750 2,625 2,375 2,250 2,000
Ad valorem  equivalent range (%) 24-26 22-24 20-22 18-21 16-19 14-18 12-16
Automatic data processing machines and units thereof (HS lines 8471.49.12 and 8471.50.30)
Ad valorem  d u t y  ( % ) 2 11 9 1 7 1 41 21 0 8
Specific duty (US$) 11,040 10,120 9,200 8,280 7,360 6,440 5,500
Ad valorem  equivalent range (%) 21-24 19-22 17-20 14-18 12-16 10-14 8-12
Automatic data processing machines and units thereof (HS lines 8471.49.14 and 8471.50.40)
Ad valorem  d u t y  ( % ) 2 0 1 71 41 2 9 7 4
Specific duty (US$) n.a. n.a. n.a. n.a. n.a. n.a. 5,500
Ad valorem  equivalent range (%) n.a. n.a. n.a. n.a. n.a. n.a. 4-5.5
n.a. Not applicable.
Source : Government of Brazil, "Lista de Convergência do Setor de Informática e Telecomunicações".
29. The simple average applied MFN is 13.7% in 2000;  this includes a general three percentage
points increase applied since 1997.  This measure is to be eliminated by 31 December 2000.  Theaverage applied MFN tariff is 12.6% for agricultural goods (WTO definition) and 13.9% for
manufactured goods.
30. Tariff dispersion, as measured by the coefficient of variation (standard deviation divided by
the average), has fallen significantly, from close to 0.8 in 1996 to 0.5 in 2000 (Table III.2).  This fall
reflects a reduction in tariff peaks and duty-free items, as well as the increased average tariff.  Half ofall tariff lines carry rates ranging from 14-21% (Chart III.1);  some 9% bear rates higher than 21%,
mainly affecting dairy products, beverages and spirits, tobacco, textiles and clothing and non-
electrical machinery.
31. The tariff shows clear escalation, with a higher tariff average on processed items than on
semi-processed goods and raw materials.  This pattern holds for all industries (Chart III.2).  The
average tariff on finished goods is 15.8%;  for semi-processed goods, 11.9%;  and for raw materials,
8.9%.
                                                     
40 WTO (1997b).WT/TPR/S/75 Trade Policy Review
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Table III.2
Summary analysis of Brazil's MFN tariff, 2000
Analysis No. of linesAverage
(%)Range
(%)Standard
deviation
(%)Coefficient of
Variation
(CV)
Total 9,371 13.7 0-35 6.7 0.5
By WTO definition
Agriculture 939 12.6 0-27 5.8 0.5
Live animals and products thereof 98 11.1 0-19 5.1 0.5
Dairy products 34 20.5 15-27 4.4 0.2
Coffee and  tea, cocoa, sugar, etc. 170 16.5 0-23 3.9 0.2
Cut flowers and plants 56 8.1 0-17 4.2 0.5
Fruit and vegetables 186 12.8 0-23 4.4 0.3
Grains 35 8.1 0-15 6.1 0.8
Oil seeds, fats, oils and their products 108 10.3 0-15 4.4 0.4
Beverages and spirits 36 21.4 15-27 3.3 0.2
Tobacco 18 18.3 13-23 2.9 0.2
Manufactures 8,411 13.9 0-35 6.7 0.5
Fish and fishery products 131 12.7 0-19 4.5 0.4
Mineral products, precious stones, etc. 454 10.6 0-23 6.0 0.6
Metals 746 14.6 3-21 5.1 0.3
Chemicals and photographic supplies 3,004 10.5 0-23 5.6 0.5
Leather, rubber, footwear, travel goods 198 16.4 3-27 6.0 0.4
Wood, pulp, paper and furniture 304 13.6 0-21 5.4 0.4
Textiles and clothing 966 20.3 5-27 3.7 0.2
Transport equipment 189 19.8 3-35 9.7 0.5
Non-electric machinery 1,117 14.3 0-30 6.1 0.4
Electric machinery 598 15.5 1-26 7.3 0.5
By sector a
Agriculture and fisheries 388 9.5 0-19 5.1 0.5
Mining 139 6.5 0-19 3.0 0.5
Manufacturing 8,843 14.0 0-35 6.6 0.5
By stage of processing
First stage of processing 835 8.9 0-23 5.0 0.6
Semi-processed products 3,514 11.9 0-21 5.8 0.5
Fully-processed products 5,022 15.8 0-35 6.7 0.4
a ISIC (Rev.2) classification.  Electricity, gas and water are excluded (1 tariff line).
Source : WTO Secretariat estimates, based on data provided by the Brazilian authorities.Brazil WT/TPR/S/75
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(0.4%)(8.4%)(49.9%)
(14.5%)(25.2%)
(1.5%)
05001,0001,5002,0002,5003,0003,5004,0004,5005,000
Duty free >0-7 >7-14 >14-21 >21-28 >280102030405060708090100Chart III.1
Frequenc y distribution of MFN tariff rates , 2000
Per cent
Cumulative per cent
Number of lines (% of total)
Source:  WTO Secretariat calculations, based on data provided by the Brazilian authorities.Total no. of tariff lines: 9,371Number of tariff lines
32. Brazil's current tariff structure is based on the Common External Tariff (CET), agreed with its
MERCOSUR partners in December 1994, which came into effect on 1 January 1995 at rates ranging
between 0% and 20%.  As discussed below, the rates for some goods were increased temporarily
(1997-2000) to 23%.  A number of sectors were temporarily excluded from the CET;  these includesugar, automobiles and parts, capital goods, informatics, and telecommunication goods.  The rates for
the latter three product groups are scheduled to conform to the CET by the year 2006, at which time
the maximum rates will be 14% for capital goods and 16% for informatics and telecommunication
goods.  Common sugar and automotive import regi mes for MERCOSUR are to be adopted by 2001.
41
33. Each MERCOSUR member has an additional exception regime – a national list of products
whose tariff rates are established in the members' tariff.  Brazil can maintain its exception regime until
2001.  As scheduled on 1 January 1999, Brazil phased out its Regime of Final Adjustment to the
Customs Union, a list of goods including items considered to be especially sensitive and thus exempt
of duty-free treatment within MERCOSUR.  As a result, as of mid 2000 all imports from
MERCOSUR entered Brazil duty free.   The Brazilian applied tariff has three annexes:  basic
exception list with 273 lines; capital goods exception list with 915 lines, and the telecommunications
list with 333 tariff lines.
                                                     
41 WTO document WT/COMTD/1/Add.4, 14 August 1996.WT/TPR/S/75 Trade Policy Review
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0510152025
Food, beverages
and tobaccoTextile and
leatherWood and wood
productsPaper, printing
and publishingChemicals Non-metal
mineral productsBasic metal Other
manufacturingChart III.2
Tariff escalation by 2-digit ISIC industry, 2000
Per cent
   WTO Secretariat calculations, based on data provided by the Brazilian authorities. Source :First stage of processing Fully processed Semi- processed
34. In November 1997, Brazil increased the CET rates and the rates specified on the list of
exceptions by three percentage points, raising the tariff ceiling from 20% to 23%.42  The authorities
noted that goods bound at 0% as a result of the Uruguay Round negotiations and basic goods were
exempt from this increase.  Brazil was able to ma intain its special concessionary regime for capital
goods, the so-called ex-tariff regime (discussed later) through the Common Market Resolution that
allows MERCOSUR members to adopt a temporary reduction of the CET to guarantee a normalproduct supply.
43
(b) Tariff bindings in the Uruguay Round
35. In the context of the Uruguay Round, Brazil bound all its tariff lines.  Bindings for
agricultural goods vary from 0% to 55%, with the highest rates applying to goods included in
Chapters 02, 04, 10, 16, 19, 20, and 22-24 (Table AIII.1).  For some 168 agricultural items the baserate was lower than the final bound rate.  Bound rates for manufactured goods range from 0 to 35%.
36. As a result of the temporary increase of three percentage points in the applied tariff, some
tariff lines appear to bear applied rates above bound rates (Table III.3).  This also appears to be the
case for certain items in HS Chapters 11, 19, 28, 29, 31, 37, 38, 43, 48, 85, and 94 (Table AIII.1).
However, a line by line comparison of applied and bound rates was not possible since Brazil uses aneight-digit classification with 9,371 tariff lines for applied tariffs, while it bound its tariff at the ten-
digit level for a total of 11,383 lines.  Moreover, a complete comparison of applied and bound rates
                                                     
42 Decree No. 2.376, 12 November 1997;  and Central Bank (1997).
43 Common Market Group Resolution GMC No. 69 (21 June 1996) amended by Common Market
Group Resolution No. 33 (22 July 1998), and Decree No. 1.989, 28 August 1996.Brazil WT/TPR/S/75
Page 35
will only be possible after the finalization of ongoing negotiations between Brazil and other WTO
Members concerning the transposition of Brazil’ s Uruguay Round Schedule of Concessions from the
1992 to the 1996 edition of the Harmonized System.  However, the Brazilian authorities noted that in
accordance with Decree No. 2.376 of 12 November 1997, the bindings negotiated by Brazil remain in
force.
Table III.3
Selected tariff lines where the MFN rate is higher than the bound rate
Bound rates (%)
HS Description Base Final MFN (%)
28100010 Boric acid 10 10 13
28332520 Sulphates; alums; pexosulphates;  of copper 0 0 13
28352500 Calcium hydrogenorthophosphate (dicalcium phosphate) 10 10 13
29033021 Fluorinated, brominated or iodinated derivatives of acyclic hydrocarbons 0 0 3
29190030 Phosphoric esters and their salts including lactophosphates, etc. 10 10 13
29362811 Vitamin E and its derivatives:  D – or DL – α – tocopherol 0 0 3
29362812 Vitamin E and its derivatives:  D – or DL – α – tocopherol acetate 0 0 3
29362819 Vitamin  E and its derivatives:  other 0 0 3
29362931 Vitamin H 0 0 3
31022910 Ammonium sulfonitrate 0 0 3
31041000 Carnallite, sylvite and other crude natural potassium salts 0 0 3
31042010 Potassium chloride:  of a K 2O content not exceeding 60% by weight 0 0 3
31042090 Potassium chloride:  other 0 0 3
43012000 Raw furskins of rabbits or hares 0 0 13
84304110 Other boring machinery, etc. - Self propelled 10 10 15
84304910 Other boring machinery, etc. – Others 10 10 15
85261000 Radar apparatus 0 0 3
85269100 Radio navigational aid apparatus 0 0 3
Photosensitive semiconductor devices mounted:
85414023 - Photodiodes 0 0 3
85414024 - Phototransistors 0 0 23
85414025 - Photothyristors 0 0 3
85414026 - Photoresistors 0 0 13
85414029 - Other 0 0 9
94011010 Seats of a kind used for aircraft:  ejector seats 1 1 21
94011090 Seats of a kind used for aircraft:  other 1 1 21
Note: The Brazilian authorities noted that in accordance with Decree No. 2.376 the bindings negotiated by Brazil remain in force .
Source : Data files provided by Brazilian Government.
(c) Concessional entry
37. Goods imported for a specific use may be admitted under the temporary admission regime
(Table III.4).  Goods admitted under this regime ar e exempt from all taxes levied on imports.  Goods
imported to supply services or to be used as inputs in the production of other goods, may also be
imported under the temporary admission regime, paying the federal taxes levied on imports during the
time that they remain in the country;  the duties and Industrial Products Tax (IPI) due are calculatedWT/TPR/S/75 Trade Policy Review
Page 36
according to a formula.  Goods imported under temporary admission may be re-exported, destroyed or
moved to another special regime, for instance free-trade zones.44
Table III.4
Cases in which goods may be admitted under the temporary admission regime
Trade fairs, exhibits, congresses, and other scientific or technical events
Scientific research and related projects previously authorized by the National Council for Scientific and Technological Develop ment
Performances, exhibits, and other artistic and cultural events
Competitions and sport exhibitions
Commercial and industrial fairs and exhibitions
Samples not for commercial use and commercial representatives' portfolios
Services supplied by foreign technicians for the maintenance of imported goods
The reposition and repair of:
- ships, airplanes or any other foreign vessels stationed in Brazilian territory, in transit or under temporary admission regime ;
- other foreign goods under the temporary admission regime
Temporary replacement of imported goods for processing, assembly, renewal, reconditioning, conditioning and reconditioning
Conditioning and maintenance of imported goods to reutilize them
Conditioning and maintenance of goods to be exported
Reproduction of phonograms and other audio-visual goods imported as master copies
Temporary activities of agricultural nature; including animals for fairs or exhibits, veterinary medicine, etc.
Assistance in case of disaster when the population and the environment is in danger
The exercise of temporary professional activities
Goods to be used by immigrants
Goods to be used by travellers
Services related to the launch of satellites, previously approved by the Brazilian Space Agency
Source: Normative Instruction SRF No. 150, 20 December 1999.
38. Goods and services imported into a free-trade zone or export zone are exempt from all taxes
and duties levied on imports.
39. Brazil phased-out its automotive regime at the end of 1999;  this provided for duty
exemptions and other tax exemption contingent to export-balancing and local-content requirements.45
Similar benefits were provided under Law No. 9.440 in 1997 to automotive industries located in the
north, north-east and centre-west of the country.46  These regional  benefits, albeit at a lower rate, are
to be phased out by the year 2010 (Chapter IV(3)).47
40. On 24 July 1997, the "ex-tariff" mechanism, under which capital goods not produced in Brazil
may be imported at concessional tariff rates, was modified.48  Approximately 3,000 capital goods
items previously imported at a zero rate were removed from the list of goods subject to concessional
entry, and the rates originally set in the CET were levied.  Some 107 products, principally in
informatics and telecommunications, continued to be imported duty free until the end of 1997, since
they were considered to be more sensitive to technological innovations and important inputs in
                                                     
44 Normative Instruction SRF No. 150, 20 December 1999.
45 Law No. 9.449, 14 march 1997;  Decree No. 2.072, 14 November 1996;  and Portaria
Inter-Ministerial No. 1, 5 January 1996.
46 Law No. 9.440, 14 March 1997;  Decree No. 2.179, 18 March 1997;  and Portaria Inter-Ministerial
No. 3, 31 March 1997.
47 Article 11, Law No. 9.440, 14 March 1997.
48 Inter-Ministerial Directive No. 174, 24 July 1997.Brazil WT/TPR/S/75
Page 37
practically all sectors of the economy.49  At the end of 1997, the list of 107 products that could be
imported under the "ex-tariff" system was modified and the tariff rate was set at 5%, a level the
authorities thought would help modernize the Brazilian industrial structure while avoiding damage to
national industry.50  In 1998, the list was again modified.51  The "ex-tariff" list contained some
1,479 items in early 2000.52
(d) Tariff quotas
41. An MFN tariff quota (10,000 tonnes) exists for pears and apples but was not opened during
1996-98 because the MFN tariff (10% in 1995-96, and 13% in 1997-98) was lower than the in-quota
tariff rate of 15%.53  The authorities noted that these tariff quotas have not been opened since 1998.
42. In 1997, Brazil notified to the WTO Members its intention to withdraw its tariff quota for
wheat (HS1001.1000.00).  This tariff quota, negotiated in 1970, has never been opened.54  T w o
Members notified their interest in negotiating the quota arrangement with Brazil;  according to the
authorities these negotiations, under Article XXVIII, have been concluded.
43. Within the framework of Economic Compleme ntarity Agreement No. 35 (ACE 35) between
MERCOSUR and Chile, preferential tariff quotas apply to 25 tariff lines.55  A preferential tariff quota
for automotive goods will be apparently in force up to end 2000;  quotas for other goods increase on ayearly basis and will be in force until 2005 or 2010.  Preference margins vary from 5% in the case of
olives to 100% in the case of, inter alia , pasta, pears, and malt.
(e) Tariff preferences
44. Brazil extends preferential import duty rates on imports from other member countries of
LAIA and MERCOSUR, and to Chile and Bolivia, which are associate members to MERCOSUR.
Those preferences have played an important role in opening the Brazilian market to foreign imports;
imports from preferential partners have increased rapidly since 1996 (Chapter I). Moreover, Brazil'spreferential tariffs appear to offer a broad pattern of full liberalization, including in agriculture,
however, a more detailed analysis to confirm this could not be undertaken as the necessary tariff data
were unavailable.
45. Brazil grants concessions under the Global Sy stem of Trade Preferences among Developing
Countries (GSTP).
(f) Other
46. Brazil does not impose seasonal, temporary, or variable import levies.
                                                     
49 Central Bank (1997).
50 Ministry of Finance Directive No. 339, 18 December 1997 (Central Bank, 1997).
51 Ministry of Finance Directive No. 245, 18 September 1998;  and Central Bank (1998).
52 Ministry of Finance Directives:  No. 339, 18  December 1997;  No. 68, 2 April 1998;  No. 201,
12 August 1998;  No. 245, 18 September 1998;  No. 319, 27 November 1998;  No. 343, 23 December 1998;
and No. 3, 12 January 2000.
53 WTO documents G/AG/N/BRA/3, 4, 8, 11, and 16.
54 WTO document G/SECRET/7, 10 April 1996.
55 These are:  HS 0703.20.00, 0711.20.00, 0808.10.10, 0808.20.10, 0809.30.10, 1107.10.10,
1504.20.90, 2008.70.10, 2002.90.00, 2204.21.10, 2833.25. 00, 2905.11.00, 2905.42.00, 8706.00.00, 8702.10.00,
8704.10.00, 8704.20.00, 8704.21.00, 8704.22.00, 8704.23. 00, 8704.31.00, 8704.31.00, 8704.32.00, 8702.90.00,
8704.90.00, and 8707.90.00.WT/TPR/S/75 Trade Policy Review
Page 38
(iv) Other charges affecting imports
47. Table III.5 lists the taxes and fees that Brazil applies on imports.  In the Uruguay Round
negotiations Brazil bound "other duties and charges" only for one line (HS 9014.80.0400) covering
certain navigational instruments, at a rate of 15%.56
Table III.5
Other charges affecting imports
Tax Rate Rationale Reference
Fixed administrative
commissionUS$50 per transaction
Port Warehousing and
Administration ContributionVariable handling charge ranging from
US$20 to US$100 according to port(e.g. US$315 per container in Santos
Port, Sao Paulo)To finance port services
Air Warehousing Contribution Varies according to the number of days
the merchandise is storedWTO (1997), Trade Policy
Review – Brazil, Geneva
Air Administration Contribution US$0.082 per kg. for goods transported
by airGazeta Mercantil ,
3 April 2000
Airport Warehouse TariffSurcharge50% of the Air Warehousing
Contribution and the Air
Administration ContributionImprovement and expansion of
airports and auxiliary servicesLaw No. 7.920 of
12 December 1989
Dock Worker Severance Pay
SurchargeVaries according to the type of cargo.
General cargoes:  0.6 UFIR (FiscalReference Unit) per tonne;  solid bulk
cargoes: 0.7 UFIR per tonne;  liquid
bulk cargoes 1.0 UFIR per tonneIndemnify workers whose
registration has been cancelledLaw No. 8.630 of 25 February
1993 and WTO (1996),Brazil – Trade Policy Review,
Geneva.
Merchant Marine Renewal Tax
(AFRMM) on imports
transported by sea25% of ocean freight charges Modernization and
improvement of the Brazilian
merchant fleetProvisional Measure
No. 1.960, 3 February 2000.
Source : Government of Brazil, and WTO (1996), and Brazil – Trade Policy Review, Geneva.
48. Other charges affecting imports mentioned in Brazil's previous Review in 1996 seem to have
been eliminated, including import licence fees, document surcharge for non-preferential customers,and a tax for the organization and regulation of the rubber market.
49. Brazilian internal taxes affecting imports include both the Industrial Products Tax (IPI) and
the Services and Merchandise Circulation Tax (ICMS).  These taxes are applied equally to imported
and domestic goods and services.
50. The IPI, a federal value-added excise tax, is levied on a wide range of domestic and imported
manufactured and processed products.  The manufacturer levies the IPI at the point of sale.  For
imports, it is levied at the point of customs clearance and is based on the c.i.f. value plus the import
duty.  The IPI rate varies according to the "degree of necessity" of the good;  in general, rates range
from 0%-20%, but they could reach up to 130% for some alcoholic beverages (HS 2208.30.10 -
60.00).
57
51. Imports into the Manaus Free Trade Zone are exempt from the IPI.58  New machinery is
exempt from the tax but the corresponding used product is not.59  Agricultural and food items, mineral
                                                     
56 WTO (1997a).
57 LDC Informações sobre Comércio Exterior [Online]. Available at:  http://www.ldci.com.br/
[15 May 2000].
58 GATT (1992).
59 Bureau of National Affairs, Inc. (1999).Brazil WT/TPR/S/75
Page 39
products, fuels, chemicals, pharmaceuticals, fertilizer s, hides and skins, wood in the rough, printed
matter, and most textiles and clothing, imported or  domestically produced, are also exempt from IPI.60
52. The ICMS is a value-added tax applicable at the state level to imported and domestically
produced goods.  The tax is levied on both intrastate and interstate transactions and is assessed on
every transfer or movement of merchandise.  On interstate movements, the tax is assessed at the rate
applicable in the State of destination.  The ICMS on imports is levied on the c.i.f. value, plus duties
and IPI;  the tax is paid to the State where th e importing firm is established.  ICMS rates vary
among states.  In general, rates are set at either 7% or 12% for interstate transactions and 17%-18% for
intrastate transactions;  the predominant rate is 18%.  The tax rate depends on the degree to which
affected products are deemed "essential".  Goods considered "superfluous" are taxed at 25% in some
States, while certain products su ch as foodstuffs are exempt.61
53. Semi-manufactured goods are exempt from the ICMS62, as are imports to be used in certain
sectors, including construction services, mining, electrical energy, liquid and gaseous fuels,
also locally produced machinery and equipment and commodities for the Manaus Free Trade Zone.
Interstate transactions involving oil, constructi on services, mining, electri c energy, liquid and gaseous
fuels, and locally produced machinery and equipment63, as well as exports from free trade zones to
other parts of the country, appear to be exempt from the ICMS.
(v) Import prohibitions, restrictions and licensing
(a) Import prohibitions and restrictions
54. Import prohibitions are in place mainly to safeguard consumer health and well being, or to
preserve domestic plant and animal life and the environment (Table III.6).  In general, import
prohibitions apply irrespective of the origin of the good, with the exception of other cereals for
planting;  fescua seeds;  and animal feed, includi ng meat flour, and bone meal, which are prohibited
only if originating in North America, Asia, Africa, and Oceania.
55. Importation of used machinery, automobiles, clothing, and many other used consumer goods
remain prohibited, with some exceptions (section (b) below).64  Other goods whose importation is
prohibited include meats treated with hormones, and fresh poultry meat.65  Brazil temporarily banned
ostrich imports in January 1998 to protect domestic poultry from exotic diseases, particularly avianinfluenza.  The ban applies to all birds and fertilized eggs.
66  Brazil has apparently banned imports of
soybeans or any other imported products containing transgenic soybeans in September 1997.
56. Imports of plants and animals in danger of extinction are also prohibited, in accordance with
the Convention on International Trade in Endangered Species (CITES).  Brazil is a signatory to the
Basel Convention prohibiting the import of hazardous wastes.  Import prohibitions apply inaccordance with the Montreal Protocol.
                                                     
60 WTO (1997a).
61 WTO (1997a).
62 Complementary Law No. 87/96.
63 WTO (1997a).
64 U.S. Department of Commerce (1999a).
65 Bureau of National Affairs, Inc. (1999).
66 Dun & Bradstreet (1999).WT/TPR/S/75 Trade Policy Review
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Table III.6
Prohibited imports
HS No. HS Description Legal document
1008.90.10 Other cereals (wheat related products originating or proceeding from the
U.S., Asia, Africa and Oceania)Decree MA No. 72, 31.08.92
1008.90.90 Other (Originating in North America, Asia, Africa and Oceania) Decree MA No. 72, 31.08.92
1209.23.00 Fescua seed (Originating in North America, Asia, Africa and Oceania) Decree MA No. 72, 31.08.92
1209.29.00 Other seeds (Originating in North America, Asia, Africa and Oceania) Decree MA No. 290/97
2301.10.10 Wheat, meat and pellets powders, giblets, and scratchings inappropriate
for human consumption (for ruminant feeding (bovines, ovines andcaprines) which contain "in natura" protein or ruminants' meat or bone
wheat)Decree MA No. 365.96
2301.10.10 Flours, meals and pellets, of meat or meat offal, greaves (animal feed for
ruminants containing natural protein, and flours made of ruminants' meat
and bones)Portaria MA No. 290/97
2301.10.90 Other (animal feed for ruminants containing natural protein, and flours
made of ruminants' meat and bones)Portaria MA No. 290/97
2309.90.20,
2309.90.40,2309.90.90Preparations with iodized salts, bones and shell wheat, preparations
containing Diclazuril, other preparations for dogs and cats food not fit forretail.  (For ruminant feeding (bovines, ovines and caprine) which
composition contains "in natura" protein or ruminant's meat or bone
wheat)Decree MA No. 365.96
2524.00.20 Asbestos in powder CONAMA Resolution No. 23/96 and
Resolution CONAMA No. 235/98
2524.00.90 Other asbestos (asbestos wastes) CONAMA Resolution No. 23/96 and
Resolution CONAMA No. 235/98
2620.11.00 Hard zinc spelter Resolution CONAMA No. 23/96 E
No. 235/98
2620.20.00 Ash and residues containing mainly lead Resolution CONAMA No. 23/96 E
No. 235/98
2620.30.00 Ash and residues containing mainly copper Resolution CONAMA No. 23/96 E
No. 235/98
2620.50.00 Ash and residues containing mainly vanadium Resolution CONAMA No. 23/96 E
No. 235/98
2620.90.10 Ash and residues containing mainly titanium Resolution CONAMA No. 23/96 E
No. 235/98
2620.90.90 Other ash and residues containing metals or metallic compounds Resolution CONAMA No. 23/96 E
No. 235/98
2713.90.00 Other residues of petroleum oils or of oil obtained from bituminous
mineralsResolution CONAMA No. 23/96 E
No. 235/98
2903.69.19 Halogenated derivatives of hydrocarbons fluorinated and chlorinated
(Residues containing "Binefolinas Policlorodos" (PCBs))Resolution CONAMA No. 23/96 E
No. 235/98
2918.19.29,
2918.19.90Biliary acid, its salts, esters and derivatives.  Other carboxylic acids of
alcohol function, anhydride (Chlorobenzilate, chlorate organ, active
ingredient destined to agriculture and livestock)Decree No. 82, 08.10.92, of SNDA/MA
(DOU of 13.10.92)
2920.10.90 Other esters, thiophosphorics, its salts, derivatives, halogen, etc.
(Parathion (phosphoroticate 0.0-dietil-0-4-nitrofenile) ethylic, active
ingredient destined to agriculture and livestock)Decree No. 82, 08.10.92, of SNDA/MA
(DOU of 13.10.92)
2933.59.49aOther heterocycle components, with pirimidine cycle, alcohol functionand/or ether (Zipeprol and its salts)Law No. 6360/76 and Decree No. 17 of
29.01.91 of the National Secretariat of
Sanitary Surveillance of the Ministry ofHealth
2933.59.99aOther heterocycle components with pirimidine/piperazine cycle (Zipeproland its salts)Law No. 6360/76 and Decree No. 17 of
29.01.91 of the National Secretariat ofSanitary Surveillance (SVS) of the
Ministry of Health
3004.90.59 Other medicaments with organic thiocomponents, etc. in doses
(Medicaments with Zipeprol or any of its salts)Law No. 6360/76 and Decree SVS
No. 17/91 of the Ministry of Health
Chap. 33 Essential oils and resinous;  prepared perfumery/toilet products and
cosmetics preparations (Spray products that use as a propellantconstant(s) substance(s) in the Montreal Protocol)Import prohibited according to the
Montreal Protocol
3402.20.00 Tensoactives preparations for washing and cleaning (non-biodegradable
detergent)Law No. 7365 of 13.09.85
3402.90.31,
3402.90.39Preparation of nonilfenol etoxilate.  Other preparations for washing
(non-biodegradable detergent)Law No. 7365 of 13.09.85
3804.00 Residual lyes from the manufacture of wood pulp, including lignin
sulphonatesResolution CONAMA No. 23/98 and
No. 235/98
4012.20.00 Used rubber tyres Resolution CONAMA No. 23/98 and
No. 235/98
Table III.6 (cont'd)Brazil WT/TPR/S/75
Page 41
HS No. HS Description Legal document
4012.20.90 Used rubber tyres Resolution CONAMA No. 23/96 and
No. 235/98
7802.00.00 Lead wastes and scraps Resolution CONAMA No. 23/96
8112.11.00 Unwrought; waste and scraps; powders (waste and residues of beryllium)
8112.20.90 Other (waste and residues of chromium)
8548.10.10 Waste and residues of electric accumulators made of lead Resolution CONAMA No. 23/96 E
No. 235/98
8107.10.90 Others (waste and scraps of cadmium) Resolution CONAMA No. 23/96 E
No. 235/98
8110.00.90 Antimony and articles thereof (only waste and scraps of antimony) Resolution CONAMA No. 23/96 E
No. 235/98
8112.91.00 Unwrought; waste and scrap powder (only waste and scraps of thallium) Resolution CONAMA No. 23/96 E
No. 235/98
8112.99.00 Other (only waste and scraps of arsenic) Resolution CONAMA No. 23/96 E
No. 235/98
8112.99.00 Other (only waste and scraps of selenium) Resolution CONAMA No. 23/96 E
No. 235/98
8112.99.00 Other (only waste and scraps of "telurio") Resolution CONAMA No. 23/96 E
No. 235/98
8112.99.00 Other (only waste and scraps of mercury) Resolution CONAMA No. 23/96 E
No. 235/98
Chap. 84 Nuclear reactors, boilers, machines, apparels and mechanic instruments
and its parts (only for installations for fire fighting, central air
conditioning, and cold store (with compressor of Unitarian power equalor superior to 100 HP) that use a coolant gas constant(s) substance(s) of
the Montreal Protocol)Import prohibited according to the
Montreal Protocol
8548.10.10 Waste and scraps of electric accumulators of lead;  useless electric
accumulators of lead (lead wastes and scraps)Resolution CONAMA No. 23/98 and
No. 235/98
Chap. 87 Automobiles, tractors, cycles, and other land vehicles, its parts and
accessories (only for new models in the market since January 97 and thatuse on its automotive air conditioning system substances of the Montreal
Protocol)Import prohibited according to the
Montreal Protocol
a Prohibited only under specific circumstances as stipulated by the law.
Source : Comunicado Decex No. 37, 17 December 1997.
57. As member of the United Nations Brazil complies with all resolutions of the Security
Council.  Thus, Brazil applies trade sanctions (i.e. on exports and imports) to Afganistan, Angola,
Yugoslavia, Iraq, Liberia, Sierra Leone, and Somalia.
(b) Import licensing
58. All goods imported into Brazil are subject to an import licence.67  Licensing can be automatic
or non-automatic.  Automatic licences are in place for statistical purposes and as a tool to monitortrade flows;  they are issued by SECEX.
68  These licences are processed when customs procedures are
initiated, through SISCOMEX, and are granted immediately.  The importer receives the licence via
modem.  Import licences are valid for six months and are renewable.  Both automatic and non-
automatic licences are free of charge.
59. Non-automatic licences may be obtained before or after shipment of goods from abroad, but
always before customs clearance.  As a general rule, the request is presented pre-shipment to avoid
prejudicial situations for the importer in which the merchandise arrives in Brazil without having
obtained a licence.   SECEX is the administrative authority responsible for issuing licences;  the
government agencies responsible for approving non- automatic licences to be issued are listed in
                                                     
67 The laws governing licensing procedures are:  Decree No. 660, 25 September 1992;  Inter Ministerial
Order No. 291 of the Ministries of Finance, and Industry, Trade and Tourism, 12 December 1996;  Order No. 21of the Foreign Trade Secretariat of MICT, 12 December 1996;  and Public Communiqués issued by DECEX(WTO document G/LIC/N/3/BRA/1, 11 May 1998).
68 WTO document G/LIC/N/3/BRA/1, 11 May 1998.WT/TPR/S/75 Trade Policy Review
Page 42
public communiqués published periodically by DECEX.69  Each concerned body independently
establishes the relevant requirements to be followed to import the product.  Authorization is madeupon presentation of a request through the SISCOMEX.
70
60. Imports subject to non-automatic licensing include products subject to a zero import duty
rate, that may cause harm to health or to the environment, or that are classified as weapons
(Table III.7).71  Non-automatic licences are also used to administer tariff quotas and to keep track of
goods imported under the drawback regime.72  Imports from MERSOSUR are subject to the same
non-automatic import licensing treatment.  It is estimated that non-automatic licences apply currently
to some 30% of all products imported into Brazil.
61. Import licences for used machines are authorized only if the machine is not produced in
Brazil or cannot be replaced by locally produced equipment.  SECEX publishes the request to import
such used items in the Official Journal ;  thereafter manufacturers have 30 days to prove local
production or the import authorization is granted.73  Used items destined for the Manaus Free Trade
Zone and international donations to all levels of the Government, government-owned, educational,
scientific, and technological organizations, and non-profit public institutions are exempt from theserestrictions, provided the imported equipment is used by public institutions.
74
Table III.7
Operations subject to non-automatic licensing
- Imports under the drawback system.
- Imports subject to quotas (tariff quotas or non-tariff quotas).
- Imports under BEFIEX.
- Imports under Laws No. 8.010 and 8.032 of the National Council of Scientific and Technological Development.
- Imports subject to the similarity test except for:  luggage;  imports by diplomatic missions;  imports by international organi zations;
packages without commercial value;  materials to repair foreign ships and aircraft;  parts, pieces, accessories, tools and uten sils used
to repair and maintain any foreign appliances, instruments and machines installed in ships and aircraft.
- Imports of used material.
- Imports into the Manaus Free Zone.
- Imports with zero per cent tariff rate.
- Imports with zero per cent tariff rate as stipulated under Decree No. 2.376 subject to approval by the Coordination Commission  of
Civil Aviation Transport (COTAC).
- Imports not requiring prior foreign exchange deposit of the following:  CD ROMs not containing audio-visual work;  samples wit h
no commercial value of primary materials;  inputs and finished goods in sufficient quantity to show its nature and quality, wit h a
value over US$1,000;  donations;  leasing;  substitute goods;  investments of foreign capital;  operations in real;  temporary
admission of audio-visual work and of products of HS Chapter 84, 8401 to 8410, 8412 to 8485, and HS lines 8701.30.00,8701.90.00, and 8704.10.00.
- Imports from Iraq.
- Imports into the free-trade area in Tabatinga, the free-trade area in Guajará-Mirim, the free-trade area in Macapá and Santana  and
the free-trade area in Cruzeiro do Sul, Brasiléia and Epitaciolândia.
- Imports subject to compulsory certification.
- Imports subject to anti-dumping duties.
Source : Comunicado Decex No. 37, 17 December 1997 and information provided by the Government of Brazil.
                                                     
69 These are: Brazilian Institute of the Environment and Natural Renewable Resources (IBAMA), the
Ministry of Agriculture, the Ministry of Health, the Ministry of Defense (Commander of the Army andCommander of the Air Force, COTAC), the Federal Police, National Nuclear Energy Commission (CNEM), theNational Petroleum Agency (ANP), the Ministry of Culture, the Brazilian Post Office and Telegraph Enterprise,and the Ministry of Science and Technology.
70 WTO document G/LIC/N/3/BRA/1, 11 May 1998.
71 WTO document G/LIC/N/3/BRA/1, 11 May 1998.
72 WTO document G/LIC/N/1/BRA/1 - G/ LIC/N/2/BRA/1, 19 June 1998.
73 Bureau of National Affairs, Inc. (1999).
74 U.S. Department of Commerce (1999a).Brazil WT/TPR/S/75
Page 43
62. Goods and operations subject to non-automatic licensing were listed in public communiqués
published by DECEX until the adoption of SISCOMEX in 1997.  After that date, the institution
imposing the licensing requirement establishes the cr iteria defining the procedures to be followed by
SISCOMEX.  The SISCOMEX has a consultation option whereby the importer can verify how eachproduct is handled administratively.
63. Effective 18 December 1997, DECEX issued a list of products subject to non-automatic
licensing.
75  Goods subject to this requirement included agricultural products, food and wine;  hides,
textiles, clothing, and footwear;  pharmaceuticals, chemicals, petroleum, and energy products;  metals
and paper;  tapes and compact discs;  certain vehicles;  and radioactive materials.76  In August 1998,
Brazil apparently introduced other modifications to its non-automatic import licensing system, which
have not yet been notified to the WTO.77
64. In October 1999, the European Union requested consultations with Brazil regarding its import
licensing regime.  The EU claimed that Brazil was creating unjustified import licensing regimes andimposing minimum prices on several imported products, notably on textiles, sorbitol and
carboxymethylcellulose.
78  The United States later joined the consultations.79  In a meeting held by the
Committee on Import Licensing, on 11 April 2000, the EU again sought clarification on the Braziliannon-automatic import licensing system.
80
65. The Brazilian authorities consider that the criteria for applying non-automatic import
licensing are in accordance with the WTO Agreement on Import Licensing Procedures.  Nevertheless,
they noted that the entire licensing system was under review in early 2000, including the viability of
drawing up a list indicating the licensing type for each product.  At that time, no list had yet been
consolidated.
(c) Prior import authorization requirements
66. There is no legislation requiring prior import authorization.
(d) Import quotas
67. As at May 2000, no imports seemed to be subject to import quotas.  Goods imported into the
Manaus Free Trade Zone were subject to quotas until 1998.  Import quotas on automotive goods
were eliminated on 31 December 1999 when the automotive regime came to an end (Chapter IV(3)).Import quotas also applied to rubber.
81
68. In 1996, Brazil introduced transitional safeguards on certain textile imports from the Republic
of Korea and Hong Kong, China (section (vii)(b)).
(e) Import surveillance
69. There is no formal import surveillance mechanism in Brazil.  However, the "Law of Similars"
is still in force and there are no plans to modify it.  The objective of this law is to prevent the
importation of goods when similar goods are produced domestically.  This law could affect anyimports, but usually comes into effect in specific cases:  imports by the federal, state and municipal
governments that are subject to fiscal incentives, imports of capital goods included in the "ex-tariff"
list, or imports of used goods (section (b) above).  The test of similarity is undertaken by SECEX.
                                                     
75 Central Bank (1997).
76 Departamento de Operações de Comércio  Exterior, Comunicado No. 37, 17 December 1997.
77 WTO documents G/LIC/M/9, 3 September, and G/LIC/W/12, 20 September 1999.
78 WTO document WT/DS183/1, 25 October 1999.
79 WTO document WT/DS183/2, 1 November 1999.
80 WTO document G/LIC/M/11, 25 April 2000.
81 WTO (1997a), Chapter III(4)(ii).WT/TPR/S/75 Trade Policy Review
Page 44
(vi) Import cartels
70. The authorities noted that in 1998 the monopoly held by Petroleo Brasileiro S.A.
(PETROBRAS) regarding imports of hydrocarbons, including natural gas, petroleum and petroleum
products was dismantled.  The National Oil Agency (Agencia Nacional de Petróleo, ANP) is in charge
of regulating trade in hydrocarbons (Chapter IV(4)).
71. INB (Industrias Nucleares do Brasil S.A.), created in 1971 to assist in development of
technology to generate electric energy, has a monopoly on imports of, inter alia , spare parts and fuel
for nuclear power plant (enriched uranium).  The qu antities to be imported are determined according
to the needs of the Brazilian nuclear power plants, operated by the FURNAS electric complex
(FURNAS Centrais Eléctricas).82  These monopoly rights are stipulated in the Constitution.83
(vii) Contingency measures
(a) Anti-dumping and countervailing measures
72. Since Brazil's previous Review, no major changes have been made to its legal framework
governing the application of anti-dumping and countervailing measures.  The legislation establishing
the judicial nature of anti-dumping and countervailing duties and the competent authorities to apply
these measures is:  Legislative Decree No. 30, 15 December 1994 (which approved the results of theUruguay Round);  Decree No. 1.355, 30 December 1994;  and Law No. 9.019, 30 December 1995.  In
addition, Decree No. 1.602 of 23 August 1995 regulates the administrative procedures related to the
application of anti-dumping measures, while Decree No. 1.752 of 22 December 1995 regulates the
application of countervailing duties.
73. SECEX determines, through an administrative process, the margin of dumping or the amount
of subsidy, the existence of material injury or th reat thereof or material retardation, and the causal
relationship between them.  SECEX is also the competent authority to initiate or renew aninvestigation, or to end it, with no application of measures, when the existence of dumping or
subsidies or damage caused by it is not established.
74. The Ministers of Finance, and of Development, Industry and Foreign Trade are in charge of
applying provisional measures and definitive dutie s, altering or terminating definitive duties as a
result of a concluded review, and accepting or terminating undertakings.  The Consultative Committeeon Trade Defense (CCDC), created in 1995 (Portaria Interministerial 14/95), had its attributions
changed in 1998 (Portaria Interministerial 21/98).  Th e CCDC is composed of representatives of the
ministries of Finance;  Development, Industry and Foreign Trade;  External Relations;  Agriculture;
and Planning and Budget;  as well as the Executive Secretary of the Foreign Trade Board (CAMEX).
The CCDC is responsible for making recommendations to the ministers, based on determinations ofSECEX, on:  prorogation of investigation deadlines; acceptance or termination of undertakings; and,
in cases where there is a positive determination of dumping or countervailable subsidy and injury,
investigation conclusion, with or without imposition of anti-dumping or countervailing duties.
84
75. SECEX  has 12 months to conclude investigations, and 18 months in exceptional
circumstances.  Provisional anti-dumping and countervailing measures may be established during thecourse of the investigation.  Provisional measures must not be applied sooner than 60 days from the
date of initiation of the investigation and, in the case of an anti-dumping procedure, may take the form
                                                     
82 WTO document G/STR/N/1/BRA, 21 March 1996.
83 The 1988 Federal Constitution, Article 21.
84 Inter-Ministerial Directive MICT/MF No. 21, October 9, 1998.Brazil WT/TPR/S/75
Page 45
of a provisional duty or, preferably, a security;  in the case of a countervailing procedure it must take
the form of a guarantee (cash deposit or bank guarantees).  In the event that, on conclusion of an
investigation, SECEX decides that there is no dumping or countervailable subsidy, or that a dumping
or countervailable subsidy does exist but does not cause or threaten injury to the domestic industry,
provisional anti-dumping duties, if collected, are refunded.
76. If the conditions established by Article 10.6 of the Anti-Dumping Agreement are met,
definitive anti-dumping (or countervailing) duties may be collected on dumped (or subsidized)
imported products released for consumption up to 90 days prior to the date of application of the
provisional anti-dumping (countervailing) measure.  Duties may not be collected on products released
for consumption prior to the date of initiation of the investigation.
77. The investigation may be closed with the imposition of measures when SECEX reaches a
final determination on the existence of dumping or countervailable subsidy, of injury and of causal
link between them.  The amount of the anti-dumpi ng or countervailing duty must not exceed the
margin of dumping or the amount of the subsidy, and must be adequate to remove the injury to the
domestic industry.  The authorities noted that whenever possible the duty applied is less than the
dumping margin or amount of subsidy.  Final anti-dumping and countervailing duty determinations
must be published in the Official Journal .
78. Anti-dumping and countervailing duty shall be terminated on a date not later than five years
from imposition (or from the date of the most recent review that found dumping or countervailing
subsidy and injury therefrom.  That period may be extended after a review.  Five months prior to the
extinction of the duty a review is undertaken to assess whether there is any interest in opening a new
investigation and whether there are grounds to do so.  The duty may remain in force pending the
outcome of such a review.
79. The proceedings of the anti-dumping investigation may be suspended if the exporters
voluntarily agree to a satisfactory undertaking to revise prices, or to cease exporting to Brazil at
dumped prices.  Similarly, in the case of subsidies, the proceedings may be suspended, without the
application of provisional measures or countervailing duties, if the government of the exporting
country commits to eliminate or reduce the subsides or to take other measures with similar effect, orthe exporter voluntarily commits to revise prices on exports destined for Brazil.
80. Reviews of the whole or a portion of a decision relative to the application of anti-dumping or
countervailing duties may be initiated at the request of an interested party or on the initiative of the
Public Federal Administration or of SECEX, as long as it has been at least one year since the
imposition of anti-dumping or countervailing duties.  Explicitly the laws do not provide for a systemof judicial review to challenge administrative decisions.  The authorities have noted that this is not
necessary since the Constitutions guarantees recourse to the judiciary.
81. In the period 1996-99, Brazil initiated 72 anti-dumping investigations, of which five were
sunset reviews (Table AIII.2).  The number of invest igations initiated each year remained relatively
constant during 1996-99:  17 in 1996, 15 in 1997, 22 in 1998, and 18 in 1999.
82. As at December 1999, there were 46 anti-dumping measures in force (Table III.8).  During
the period under review, Brazil imposed definitive anti-dumping in 36 cases on, inter alia , bicycle
tyres, chemicals, minerals, metals, resins, and textiles.  China, the United States, and South Africa
were the countries most affected.WT/TPR/S/75 Trade Policy Review
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Table III.8
Anti-dumping measures in force as of December 1999, by country and product
Country Date filed ProductProvisional measure
(dumping margin)Definitive duty
(dumping margin)
Bangladesh 24/09/97 Sacks and bags of jute 64.5%
Bosnia Herzegovina 20/01/95 Ferro-chromium less than 4% of carbon 45.5%
Chile 07/04/97 Ore steel grinding balls 13.88%
China 13/01/94 Table electric fans 35.09% - 62.91% % not reported
06/09/94 Padlocks US$0.33 –
US$1.42/per unit
08/12/94 Garlic, fresh or refrigerated 36/% $0.40/kg on
03/07/97 Barium carbonate 92%
04/06/98 Glass inners for vacuum flasks 65% 45.8%
04/06/98 Vacuum flasks 44% 47%
09/01/98 High speed steel helicoidal drill (diameter till 1 inch or 25.4 mm) 135.11%
05/06/97 Permanent magnets ferrite rings and discs 43%
07/02/97 Mushrooms provisionally preserved and prepared or preserved US$1.37/kg
05/07/96 Bicycle tyres 66.57%
21/02/96 Colour pencils and black pencils 288.5% 202.3% for colour
pencils 301.3% forblack pencils
Chinese Taipei 05/07/96 Bicycle tyres 4.78 to 96.64%
Croatia 20/01/95 Ferro-chromium less than 4% of carbon  45.5%
Former YugoslavRepublic ofMacedonia20/01/95 Ferro-chromium less than 4% of carbon 45.5%
France 30/11/98 Cold-rolled flat stainless steel 6.4%
Germany 12/02/98 Polycarbonate resins 9%
India 05/07/96 Bicycle tyres 31.98% - 119.53%
24/09/97 Sacks and bags of jute 38.9%
Japan 30/11/98 Cold-rolled flat stainless steel 44.2%
Kazakstan 26/04/99aFerro-chrome less than 4% of carbon 27.19%
11/09/97 Ferro-chromium more than 4% of carbon 10.38%
Mexico 15/12/97 Polyvinyl chloride 18%
30/11/98 Cold-rolled flat stainless steel 42.2%
Romania 12/02/98 Pumping unit 57.7%
19/10/98 Line pipe up to 5 inches 32.2%
Russian Federation ..aFerro-chrome less than 4% of carbon rate not available
11/09/97 Ferro-chromium more than 4% of carbon 6.57%
Slovenia 20/01/95 Ferro-chromium less than 4% of carbon 45.5%
South Africa 11/09/97 Ferro-chromium less than 4% of carbon 7.47% - 22.47%
12/02/98 Ferro-chromium more than 4% of carbon 8.39%
30/11/98 Hot and cold-rolled flat stainless steel 11.5%-19.2%
Spain 30/11/98 Cold-rolled flat stainless steel 20%
Thailand 05/07/96 Bicycle tyres 37.59% - 58.49%
Ukraine 26/04/99 aFerro-chrome less than 4% of carbon 27.19%
United Kingdom 05/07/96 Sodium tripolyphosphate 39.82%
United States 15/12/97 Polyvinyl chloride 16% .
15/09/97 Vacuum blood containers 64.27 to 91.80% .
15/09/97 Laboratory reagents 64.27 to 91.80% .
12/02/98 Polycarbonate resins 19%
19/10/98aVacuum blood containers made of glass 34.4%
19/10/98 aLaboratory reagents on a backing of glass and plastic 8.63% to 54.13%
Yugoslavia 20/01/95 Ferro-chromium less than 4% of carbon 45.5%
.. Not available.
a Anti-dumping measures under review.
Source : WTO documents G/ADP/N/ - series.Brazil WT/TPR/S/75
Page 47
83. Since 1996, one countervailing duty investigation has been undertaken, regarding cotton (not
carded or combed) originating in the United States;  no final measure was taken.85  Six countervailing
measures were in place in late 1999, involving powdered coconut originating in Indonesia, Côte
d'Ivoire, Malaysia, Philippines, and Sri Lanka, and coconut milk originating in Sri Lanka
(Table III.9).86
Table III.9
Countervailing measures in place, 1996-99
Country Product Date of definitive measures
Côte d’Ivoire Powdered Coconut 21.08.95
Indonesia Powdered Coconut 21.08.95
Malaysia Powdered Coconut 21.08.95
Philippines Powdered Coconut 21.08.95
Sri Lanka Coconut Milk 21.08.95
Powdered Coconut 21.08.95
Source: WTO document G/SCM/N/56/BRA.
84. On 27 November 1995, the Philippines requested consultations with Brazil regarding the
countervailing duty imposed by the latter on desiccated coconut originating in the Philippines.87
The Philippines requested the establishment of a panel in early 1996, which was established on5 March 1996.
88  The Panel found that:  Article VI of GATT 1994 did not constitute applicable law
for purpose of the dispute;  that the Agreement on Agriculture did not constitute applicable law for the
purpose of the dispute;  and that the Philippine's claim regarding Brazil's failure to consult was not
within the terms of reference of the Panel and therefore its substance could not be considered.  Thus
the Panel concluded that the substance of the Philippines' claims were not properly before it.89  The
Philippines appealed, the Appellate Body upheld the conclusions of the Panel.  In a separate case,
Sri Lanka requested consultations with Brazil regarding countervailing duties on imports of
desiccated coconut and coconut milk powder in February 1996.90
85. In preparation for the WTO Ministerial Conference in 1999, Brazil proposed improvement of
several provisions of the WTO Anti-Dumping Agreement, to reduce the Members' abilities to
arbitrarily apply anti-dumping measures, avoid their perpetuation, or their widespread use as a means
of protecting inefficient sectors of the domestic industry.  Such misuse was promoted by the limited
legal resources available to the affected countries to contest the legality of measures;  the country
imposing them was protected by the Agreement's lack of clarity, especially with respect to the criteriafor the imposition and collection of duties, the procedures for reviews, and the methodology of
calculations.
91
                                                     
85 WTO document G/SCM/N/19/BRA, 12 September 1996.
86 WTO document G/SCM/N/56/BRA, 14 February 2000.
87 WTO document WT/DS22/1, 20 December 1995.
88 WTO documents WT/DS22/2, 19 January 1996, WT/DS22/5, 8 February 1996, and WT//DS22/7,
19 September 1996.
89 WTO documents WT/DS22/R/, 17 October 1996, WT/DS22/8, 18 December 1996, and
WT/DS22/AB/R, 21 February 1997.
90 WTO document WT/DS30/1, 5 March 1996.
91 WTO document WT/GC/W/269, 26 July 1999.WT/TPR/S/75 Trade Policy Review
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(b) Safeguards
86. Brazil's law regulating safeguard measures is the WTO Agreement on Safeguards, which was
incorporated into the Brazilian legislatio n through Decree No. 1.355 on 30 December 1994.92
Administrative procedures for the application of safeguard measures are established in Decree
No. 1.488 of 11 May 1995, amended by Decree No. 1.936 of 20 June 1996.93  This legislation was
detailed in the Secretariat Report for Brazil's previous Review.94
87. Brazil initiated one safeguard investigation, involving toys, during 1996-99.95  SECEX made
a preliminary determination of serious injury to the domestic industry caused by the rapid increase in
imports, and applied a provisional safeguard measure, in force until 31 December 1996.96  T h u s ,
import duties on some toys were raised by 50 percentage points, in addition to the applied tariff of
20%, resulting in a total ad valorem  duty of 70%.  Following an affirmative determination of serious
injury or threat thereof, the Brazilian authorities applied a safeguard measure on imports of toys, in
force during 1997-99.97  The measure, applied since mid-1996, consisted of an increase in the tariff
rate on finished toys, by means of an additional charge to the CET, according to a specific
schedule:  in 1997, the charge was 43 percentage points;  in 1998, 29 points;  and in 1999, 15 points,
when the total duty was 35%.  By the proposed schedule, the rates applied in 1997 and 1998for HS lines 9501.0001.99, 9501.0099.00 and 9504.1090.01 were higher than the bound level agreed
for those years.
98  This measure did not affect imports from some developing countries.99  O n
29 September 1999, Brazil initiated a review of the measure, which was extended from
1 January 2000 until 31 December 2003.100
88. In 1996, Brazil applied the transitional safeguard of the Agreement on Textiles and Clothing
(ATC) in respect of products originating in Hong  Kong, China, and Korea.  The measures against
Hong Kong, China involved woven artificial filament fabrics (category 618), and men's and boys'knitted or crocheted shirts (838);  the measure was introduced on 1 June 1996 under Article 6.11 of
the ATC.
101  In the subsequent reviews of the measures by the WTO Textile Monitoring Body (TMB),
it was recommended that the restraint on category 618 be removed by 31 December 1997 and the
restraint on category 838 be removed immediately.  This was accepted by Brazil and the restraints
were removed on 31 December 1997 and on 6 January 1997, respectively.  The measures againstKorea were also introduced on 1 June 1996, under ATC Article 6.11, and involved five categories of
fabrics (611, 618, 619, 620, 627), and men's and boys' knitted and crocheted shirts (838).
102  I n
bilateral consultations under the provisions of the ATC, it was agreed that these restraints would be
                                                     
92 WTO document G/SG/N/1/BRA/1, 11 April 1995.
93 WTO documents G/SG/N/1/BRA/3, 26 March 1996, and G/SG/N/1/BRA/3/Suppl.1, 27 January
1997.
94 WTO (1997a).
95 Products subject to investigation were all toys classified under the following HS positions:
9501.00.00;  9502.10.10 - 9502.10.90 - 9502.91.00 - 9502.99.00;  9503.10.00 - 9503.10.00 - 9503.30.00 -9503.41.00 - 9503.49.00 - 9503.50.00 - 9503.60.00 - 9503. 70.00 - 9503.80.10 - 9503.80.90 - 9503.90.10 -
9503.90.90;  9504.10.10 - 9504.10.91 - 9504.10.99 (WTO document G/SG/N/6/BRA/1, 25 June 1996).
96 Interministerial Order No. 9, 21 June 1996.
97 Interministerial Order No. 21, 19 December 1996.
98 WTO document G/SG/N/8/BRA/1, 20 November 1996.
99 Antigua and Barbuda, Bangladesh, Bolivia, Chile, Colombia, Ecuador, Guatemala, India, Indonesia,
Macau, Malaysia, Mexico, Paraguay, the Philippines, Singapore, Republic of Korea, Sri Lanka, Uruguay, and
Venezuela (WTO document G/SG/N/11/BRA/1 Suppl.1, 28 October 1997).
100 WTO documents G/SG/N/14/BRA/1, 8 November 1999, G/SG/N/8/BRA/2, 2 December 1999, and
G/SG/N/8/BRA/2/Suppl.1, 9 March 2000.
101 WTO documents G/TMB/R/16, 20, 22, 24, 25, and 26.
102 WTO documents G/TMB/R/16, 27.Brazil WT/TPR/S/75
Page 49
applied for a three-year period ending 31 May 1999.  In its review of these measures, the TMB found
them to be justified.
89. There is a common MERCOSUR regulation in place on the application of safeguard measures
to extra-MERCOSUR imports.103  This regulation is based on the WTO Agreement on Safeguards and
establishes the procedures for the application of safeguard measures by MERCOSUR, as a single
entity, and in the name of a member State.  Brazil used MERCOSUR's dispute settlement mechanismregarding a transitional safeguard introduced by Argentina on imports of woven fabrics of cotton
mixtures, consisting of five quotas on imports from Brazil.
104  Brazil later requested the TMB to
examine the matter.105  On 13 April 2000, Argentina withdrew the transitional safeguard measures on
imports of textile products in categories 218, 219 /220, 224, 313/317 and 613/617/627.  In light of the
measure taken by Argentina, Brazil and Argentina agreed to suspend the procedures for thecomposition of a panel (WT/DS190/1).
106
(viii) Standards and other technical requirements
(a) Standards and technical regulations
90. The WTO Agreement on Technical Barriers to Trade came into force in Brazil, as a law, on
30 December 1994, when the Agreement Establishing the World Trade Organization was ratified.107
On 1 September 1995, the Brazilian Association for Standardization (ABNT) accepted the Code of
Good Practice for the Preparation, Adop tion and Application of Standards.108
91. Since 1996, no modifications have been made to the guidelines for elaborating federal
technical regulations, to the processes for the preparation, approval and edition of standards, nor to the
institutions involved in these processes (Table III.10).  Activities remain decentralized, with different
agencies representing individual sectors involved in  the development of standards.  However, the
National Council of Metrology, Normalization and Industrial Quality (CONMETRO), together with theNational Institute of Metrology, Normalization and Industrial Quality (INMETRO), as overall
responsibility regarding normalization, regulation, testing and certification policy.
92. Guidelines for the elaboration, revision, revocation, and dissemination of technical
regulations were issued by CONMETRO in 1995.
109  Authority to issue technical regulations lies with
the different ministries  with competence in the specific area to be regulated.  Such regulations take the
form of laws, decrees or resolutions, as appropriate, and are published in the Official Journal .
93. The examination of standards is carried out in accordance with internationally accepted ISO
and IEC criteria.  Standards are adopted through a process of consensus in which both the public and
the private sector participate.  Foreign participation also occurs since the Brazilian authorities often
discuss standards in international fora.  Once standards have been approved, they are adopted by theBrazilian Association of Standardization (ABNT), which also notifies them to ISO.
                                                     
103 Decree No. 2.667 of 10 July 1998.
104 Products subject to transitional safeguard:  categ ories 218 (woven cotton and cotton mixtures fabrics
of yarns of different colours), 219/220 (duck/special-weave cotton and cotton mixtures fabrics), 224 (pile tuftedcotton and cotton mixtures fabrics), 313/317 (sheeting/twill cotton and cotton mixtures fabric) and 613/617/627(sheeting fabrics/twill and satin/staple-filament fibre combinations of cotton and cotton mixtures).
105 WTO document G/TMB/R/58, 12 November 1999.
106 WTO document WT/DS190/2, 30 June 2000.
107 Decree No. 1.355, 30 December 1994.
108 WTO document G/TBT/CS/N12, 1 September 1995.
109 WTO (1997a).WT/TPR/S/75 Trade Policy Review
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Table III.10
Organizations involved in standards, testing and certification
Acronym Name Remarks
ABNT Brazilian Association of Standards Private entity;  formulates, revises and publishes standards.
CONMETRO National Council of Metrology,
Normalization and Industrial QualityGovernment agency responsible for establishing industrial standards and
certification policy.  The Council is composed of several ministries,
representatives from consumer groups, industry and the ABNT, under the
presidency of the Minister of Development, Industry and Foreign Trade.
CBC Brazilian Committee on Certification Advisory Committee of CONMETRO to plan and evaluate  conformity
certification in Brazil.
CBM Brazilian Committee on Metrology Advisory Committee of CONMETRO to plan  and evaluate policies
regarding metrology.
CNN National Committee on Normalization Advisory Committee of CONMETRO to plans and evaluate standardizing
activities in Brazil and their relationship to technical regulations.
CONACRE National Committee on Acreditation Advisory Committee of  CONMETRO in charge of planning and evaluating
the accreditation of calibration and testing laboratories.
INMETRO National Institute of Metrology,
Normalization and Industrial QualityINMETRO is the national metrology laboratory and also the accreditation
body for the Brazilian Certification System (SBC);  it also supports
CONMETRO and its Committees.
SINMETRO National System of Metrology,
Normalization and Industrial QualityGovernment forum responsible for the formulation and implementation of
national policies on metrology, normalization and quality certification.
MMA Ministry of Environment Formulation of  national policy in the area of pollution control and
management of the use of natural resources.
ANATEL National Telecommunications Agency Agency in charge of regulating the telecommunications sector.
ANEEL National Electrical Energy Agency Agency in charge of regulating the electrical energy sector.
ANP National Petroleum Agency Agency in charge of regulating the petroleum sector.
ANVS National Agency for Sanitary
SurveillanceCoordinating agency for the Brazilian System of Sanitary Surveillance.
CONTRAN National Transit Council A council, formed by several ministries, government bodies and entities
representing the civil society, in charge of highway transit regulations.
CONAMA National Council for the Environment A council, formed by several ministries, government bodies and entities
representing the civil society, in charge of environmental regulations.
IBAMA Brazilian Institute of the Environment
and Renewable Natural ResourcesIn charge of environmental regulations.
Source : Brazilian authorities.
94. Since its previous Review, Brazil has adopted some 1,480 standards, of which some 9.7%
were international standards, and 12.7% were based on ISO/IEC standards, taking into account the
specific Brazilian circumstances regarding technology and the environment.  Goods affected by the
adoption of international standards included:  hospi tal equipment, electrical equipment, machines,
automobiles, road machines, and road tools.  No  equivalent information is available regarding
technical regulations.
95. Certification is generally voluntary in Brazil.  Products and services subject to compulsory
certification are those which may affect health, safety or the environment.110  There is no consolidated
detailed information on the products subject to compulsory certification.
96. Brazil recognizes product and system certification from other countries as long as the body of
foreign certification has a memorandum of understanding with a Brazilian certification body.Products subject to compulsory certification and legal metrology, as defined by INMETRO, have
been processed through a system of non-automatic import licensing as of 16 November 1998
(section (2)(v)(b)).
111
                                                     
110 WTO (1997a).
111 SECEX Circular No. 40, 30 October 1998.Brazil WT/TPR/S/75
Page 51
97. To prove compliance with Brazilian technical regulations, users may use a Suppliers
Declaration.  However, the supplier must have a legal representative in Brazil responsible for the
issuance of the document.112  The use of a Suppliers Declaration is also encouraged to prove
compliance with standards.  A product that is cert ified through the Brazilian System of Certification
in relation to requirements established in a technical regulation is exempt of the Suppliers Declaration.
98. In mid 2000, Brazil was seeking mutual recognition in the area of laboratories (tests and
calibration) with two regional bodies:  the European Accreditation and the Asian Pacific Laboratories
Accreditation Cooperation.  Since 1996, Brazil has signed five agreements regarding the acceptance
abroad of testing procedures performed in Brazil (Table III.11).
Table III.11
Mutual Recognition Agreements signed by Brazil since 1996
Memorandum of Understanding signed by ANVS (Brazil) and ANMAT (National Administration of Medicines, Foodstuffs and Medical
Technology of Argentina) related to food products circulation (25 November 1999).
Conformity Assessment Bilateral Protocol between Brazil and Argentina (29 October 1999).
Mutual Recognition Agreement related to the Equivalence of National Meter Standards and Calibration and Measuring Certificates
issued by National Metrology Institutes, signed by Metrology Convention Members (14 October 1999).
Mutual Recognition Agreement with IAF International;  Accreditation Forum, for quality systems certification (23 August 1999).
Framework Agreement under ALADI for "Trade promotion by abolishing technical trade barriers involving standards, technical
regulations and conformity assessment".
Source : Government of Brazil.
Labelling and Marking requirements
99. The Brazilian Customer Protection Code, in effect since 12 September 1990, requires that
product labelling provide the consumer with correct,  clear, precise, and easily readable information
about the product's quality, quantity, composition, price, guarantee, shelf life, origin, and risks to the
consumer's health and safety.  Imported products should bear this information in Portuguese.  Since
metric units are the official measuring system, products should be labelled in metric units or show a
metric equivalent.
100. Imported merchandise with labels in Portuguese must bear an indication of the country of
origin.  In addition, all labels must contain the brand or name of the manufacturer.113  Medicines,
textiles, pharmaceutical specialities, and certain foodstuffs are subject to specific labelling
regulations.  Many processed food products are required to have their labels approved by the Ministry
of Agriculture.  Goods subject to compulsory certification must be marked with the acronym RTB
(Brazilian Technical Regulation).114
101. New regulations regarding marking, labelling and packaging have been introduced since 1996
(Table III.12).  Goods affected include meat products, candles, toys, textiles, candies, and clinical
thermometers.
                                                     
112 Annex 11, CONMETRO Resolução No. 4, 16 December 1998.
113 Bureau of National Affairs, Inc. (1999).
114 CONMETRO Resolução No. 4, 16 December 1998.WT/TPR/S/75 Trade Policy Review
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Table III.12
New labelling and marking regulations, 1996-99
Regulation Date Subject Comments
Directive INMETRO No. 88 28 February 1996 Pre-measured products Quantitative indication of pre-
measured products
Directive INMETRO No. 19 7 March 1997 Meat products Meat products (encased or not),
fresh, dried, salted, cured andraw must have an indication of
their liquid weight.
Directive INMETRO No. 5 7 January 1998 Candles Indication of the net quantity in
mass units.
Directive INMETRO No. 34 19 February 1998 Measuring instruments subject
to metrological verificationApproval of the "Verification
Mark" and the "Non-conformity to Use" label as
well as the "Calibrated" label
to identify calibration servicesrendered by natural or juristic
persons authorized by the
National Metrology System
Directive INMETRO No. 177 30 November 1998 Toys Toys must bear the Conformity
Mark of the use the Brazilian
System of Certification
Directive INMETRO No. 180 14 December 1998 All products Packaging
Directive INMETRO No. 19 29 January 1999 Textiles Labelling of raw materials used
in the manufacture of thespecific products resulting
from non-woven products.
Directive INMETRO No. 73 19 May 1999 Packaging of candies and other
sweets.The packaging of candies in
general, chewing gum,
caramels, sweets in bars, and
chocolates should have theirquantitative labelling expressed
in legal mass units, their
multiples and sub-multiples.
Directive INMETRO No. 100 26 October 1999 Clinical thermometers Specification of the required
metrology verification mark.
Directive INMETRO No. 101 10 September 1999 Plastic packaging The plastic packaging,
including lids of a volume of
up to 5 litres, used to bottlealcohol, nationally produced or
imported for sale within the
country, is subject tocompulsory certification by the
Brazilian Certification System
(SBC).
Source : INMETRO [http://www.inmetro.gov.br/bd_rtf.htm], 25 April 2000.
(b) Sanitary and phytosanitary measures
102. The Ministry of Agriculture, through the Secretar iat of Agricultural Defense, is responsible
for administering regulations concerning animal and plant health measures applied to domestic goods,
imports and exports of animals, plants, and their products;  and animal and plant health measures
designed to reduce the risk of entry, establishment or spread of animal diseases and plant pests and
diseases.  The Ministry of Health, through the Secretariat of Health Vigilance (SVS), is responsible
for administering regulations concerning sanitary measures to protect human health, applied toimported and locally produced foodstuffs;  and sanitary measures designed to avoid or reduce the risk
of entry, establishment or spread of epidemics of human diseases.Brazil WT/TPR/S/75
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103. In order to determine the sanitary and phytosanitary measures applicable to the entry of
animals, plants and related products, a risk analysis is carried out taking into account the place of
origin and the product.  The Secretariat of Health Vigilance and the Secretariat of Agricultural
Defense issue directives that list the products subject to sanitary requirements, and are thus also
subject to non-automatic import licences.  According to the authorities the criteria used to impose a
non-automatic licence and the procedures to apply for such a licence are based on the evaluation ofthe risk to human, animal health, and life protection.  The lists available in SISCOMEX have the
objective of orienting importers as regards compliance with health and plant health requirements, and
reducing costs due to possible long delays for inspection, which was previously carried out only whenthe product arrived at the customs terminals.
104. Portaria No. 283/SDA (9 October 1998) prescribes the conditions of recognition of inspection
systems and the certification of foreign establishments.  Goods included in Chapters 1, 3, 5, 6, 7, 8, 9,
10, 12, 20, 22, 44 and 45 of the CET are subject to sanitary and phytosanitary inspection before being
dispatched from customs
115;  goods included in Chapters 2-5, 14-16, 18-19 of the CET require an
inspection before shipment.  In this case, the inspections take place in an establishment registered withthe Ministry of Agriculture, or in a dry port (Estação Aduaneira Interior de Destino, EADI).
116
105. Onsite reviews are also used for sanitary and phytosanitary evaluation of countries wishing to
export to Brazil or for the certification of foreign establishments.  The onsite review verifies that
sanitary and technical conditions are in compliance with Brazil's requirements; the cost of the visit
appears to be generally paid by the potential exporter. In addition, Brazilian regulations require allcompanies exporting products of animal origin (beef , pork, seafood, and dairy products) to Brazil to
be registered with the Animal Origin Products Inspection Department (DIPOA) at the Ministry of
Agriculture.  Imported goods are inspected at the port of entry for hygienic or sanitary factors.
106. Brazil accepts phyto- and zoosanitary certificates issued by official sanitary services in
countries of origin that follow the guidelines outlined by international scientific organizations such as
the FAO, Commission for Phytosanitary Protection, and the International Office of Epizootics (OIE).
107. Importers, exporters or manufactures of pharmaceuticals, cosmetics, and foodstuffs, must be
authorized by, and registered with the Secretariat of Health Vigilance in the Ministry of Health.
Product registrations are valid for five years, with the exception of diet products, which are valid fortwo years.
117
108. Brazil is a member of  International Office of Epizootics (OIE), FAO International Plant
Protection Convention (IPPC), FAO/WHO Codex Al imentarius Commission (Codex), and the Inter-
American Institute for Agricultural Cooperation (IICA) (plant and animal health programmes).  Brazil
has also signed bilateral agreements on Plant and Animal Health with:  Australia, Canada, China,
Chile, the Czech Republic, Hungary, India, Mexic o, the Netherlands, New Zealand, Peru, Russia, and
Venezuela.  These agreements are aimed at trade facilitation through the mutual recognition of
certification systems, harmonization of import controls and related matters;  those with non-WTOMembers seek to establish conditions compatible with the multilateral trading system.
109. Since 1 January 1996, Brazil has been a member of the Ministerial Council for Plant Health
of the Southern Cone (COSAVE), a regional orga nization operating within the framework of the
International Plant Protection Convention.  In 1997, COSAVE adopted the international quarantine
standards of the FAO.
118  Brazil is also a member of the Commission on Animal Health of
                                                     
115 Decree No. 2.376, 15 November 1997.
116 Decree No. 2.376, 15 November 1997.
117 Dun & Bradstreet (1999).
118 For more information on COSAVE see WTO document G/SPS/W/38, 6 December 1995.WT/TPR/S/75 Trade Policy Review
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MERCOSUR.  MERCOSUR's Sanitary and Phytosanitary Agreement (ACSAFIM) was repealed
when the WTO Agreement on Sanitary and Phytosanitary measures was adopted.119
(ix) Government procurement
110. There is no central procurement agency in Brazil;  largely as a result, there are no detailed
statistics on government procurement.  According to public finance figures, purchases by the publicsector including capital and current expenditures (but excluding salaries and transfers) amounted to
some 12% of GDP in 1998.
120  No data are available on government purchases (including parastatals)
over the last decade.
111. Brazil does not participate in the WTO plurilateral Agreement on Government Procurement
(GPA).  According to the authorities, Brazil was not  planning to join the GPA, mainly because the
authorities believe it is administratively burdensome and too complex to apply.
112. Government procurement regulations are contained in Law No. 8.666 (Tendering Law) of
12 June 1993, amended by Laws No. 9.648 of 27 May 1998, and No. 9.854, of 7 October 1999.  The
amendments were aimed at streamlining administrative procedures, without changing the principles ofLaw No. 8.666.  The latter establishes general norms regarding tenders and administrative contracts
(for goods and services) to be followed at the federa l, state and municipal levels, by entities directly
and indirectly administered by the Federal Government, special funds, public enterprises, andcompanies of joint public and private ownership controlled by the Government.
113. Since the enactment of Constitutional Amendment No. 6, of 15 August 1995, which
suppressed the difference between nationally owne d and foreign-owned companies, there is no
distinction between Brazilian and foreign enterprises in the government procurement processes.  In
general, the law offers non-discriminatory treatment for all bidders, regardless of nationality or origin
of product or service.  Nevertheless, in case of a tie in the tendering procedure, preference is given to
goods produced or services supplied by Brazilian firms of national capital;  domestically produced in
Brazil;  or produced or supplied by a Brazilian company.
121  Foreign firms without operations in
Brazil and involved in international tenders must have legal representation in the country or be
associated with a Brazilian firm.  To be considered Brazilian, a firm must have majority Braziliancapital participation and decision-making authority (operational control).
122  All procurements funded
by international financial institutions are open to in ternational bidding and subject to the rules of the
financing institution.123
114. Tenders may take one of five modalities:  open tendering or competition among any
interested parties;  limited tendering involving price quotes from officially registered firms;  selective
tendering involving an invitation by the administra tion;  tendering  competition among parties for
technical scientific or artistic projects;  and public auctions for specific goods.124  The mode of
tendering in the case of construction and engineering services, and of other purchases and services, is
determined on the basis of the estimated value of the contract (Table III.13).125
115. The time required for the conclusion of a tender appears to vary between 15 days (less in the
case of invitation by the administration) and six months (in the case of the open tendering).  The basic
principle guiding the selection among bids is the most advantageous offer for the public
                                                     
119 Decision of the Council of the Common Market No. 6/96.
120 WTO Secretariat calculation, based on IMF data.
121 Art 3, §2 of Law No. 8.666, 21 June 1993.
122 WTO (1997a).
123 Dun & Bradstreet (1999).
124 Art. 22 of Law No. 8.666, 21 June 1993.
125 Art. 23 of Law No. 8.666/93 amended by Law No. 9.648/98.Brazil WT/TPR/S/75
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administration, in terms of best price, best technical offer, or both technical offer and best price.126
The period of validity of offers is established in the invitation for tender, averaging 60 days.
Table III.13
Mode of tendering according to estimated value of the contract
Type of project Thresholds (based on estimated value of the contract) Form of tender
Construction and engineering services R$150,000 Selective tendering
R$1,500,000 Limited tendering
over R$1,500,000 Open tendering
Other purchases and services R$80,000 Selective tendering
R$650,000 Limited tendering
over R$650,000 Open tendering
Source: Law No. 8.066 of 21 June 1993 as amended by Law No. 9.648 of 27 May 1998.
116. Once the tendering procedure has been concluded, an abstract of the contract is published in
the Official Journal , including the names of the parties, the value of the contract, the period of validity
and the number of the tendering process.  The re-opening of a tender occurs when all bids are
disqualified.  Disqualification occurs either because of non-compliance with the requirements of the
bid or underpricing.  A bid for construction and engi neering services is considered underpriced when
the value stipulated in the bid is less than 70% of  the lower of:  (a) the average value of the proposals
that are 50% above the value budgeted for the operation;  or (b) the value budgeted by theadministration.
127  In these cases, the entity conducting the procurement may establish a period of
eight working days for the presentation of corrected bids, with the possibility of, in the case of direct
contracting;  reducing this period to three days.128
117. Throughout the procurement process, all decisions taken by the Tendering Commission may
be administratively appealed, including the results of the classification at the end of the tendering
procedure.  In these cases, bidders have a period of five working days to present complaints andanother five days for appeals.  The possibility of a judicial recourse, once the means of administrative
recourse are exhausted, is ensured.
118. Purchases of telecommunications, computer, and digital electronics products are exempt from
Law No. 8.666.  The provisions of Law No. 8.248/91, regulated by Decree No. 1.070/94 govern the
procurement of telecommunications equipment, computers and computer software, and services
related to these areas.  The determining factor in selecting suppliers is the best technical offer and
price.
129  However, Law No. 8.666 allows for considerati on of non-price factors, granting preferential
treatment for locally manufactured telecommunications, and informatics products containing
significant local value added.130
(x) Local-content schemes
119. Local-content requirements are among the measures used in support of the automotive sector.
The nation-wide automotive regime, an incentive programme prescribing local-content requirements,
was phased out on 31 December 1999.  However, a similar programme, also linked to local contentbut in force only in specific areas of the country will be in force until 2010.
120. Local-content requirements were a requisite to obtain export financing under PROEX,
FINAMEX, and FINAME (section (3)(viii)).  Fiscal incentives in the informatics industries were
conditional on meeting local value-added requirements.
131
                                                     
126 Art. 45 of Law No. 8.666, 21 June 1993.
127 Art. 48, §1 of Law No. 8.666, 21 June 1993.
128 Art. 48, §3 of Law No. 8.666, 21 June 1993.
129 Art. 45 § 4 of Law No. 8.666, 21 June 1993.
130 WTO (1997a).
131 WTO (1997a).WT/TPR/S/75 Trade Policy Review
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121. In preparation for the WTO Ministerial Conference in 1999, Brazil proposed that specific
provisions be included in the Agreement on Trade-Related Investment Measures to provide
developing countries the necessary flexibility to implement development policies (intended to
address, inter alia , social, regional, economic, and technological concerns) that may help reduce the
disparities they face vis-à-vis developed countries.132
(xi) Balance of payments and countertrade
122. Brazil does not maintain any import restrictions for balance-of- payments purposes.
123. Brazil has no legislation regarding countertrade.
(3) MEASURES DIRECTLY AFFECTING EXPORTS
(i) Procedures and documentation
124. Since 1996, no significant modifications have been made to Brazilian export procedures;
once SISCOMEX was introduced in 1993, procedures were already greatly simplified, eliminating
documents, and authorizing operations to be processed electronically.  In early 2000, a project was
being elaborated to revise SISCOMEX's export module, to update technology and integrate it with theimport module.
125. All exporters must be registered in the Exporters and Importers Registry at the Secretariat of
Foreign Trade (SECEX) for statistical purposes.  The Export Registry document is processed via
SISCOMEX before embarking the merchandise.
133  Other documents required for export include:  the
bill of lading, a packing list, a letter of credit, exchange rate contract, commercial invoice, and in
some instances a certificate of origin.134  The Registry of Sale, which stipulates the conditions of the
export operation is required for the export of goods such as coffee, soya, sugar, orange juice, cocoa,
aluminium, and gold.135
126. Export licences are required only for exports of restrainted textiles and clothing products to
Canada, the European Union, and the United States (section (iii)(c)).136  Export licences are issued by
Banco do Brasil.
(ii) Export taxes and minimum export prices
127. All exports are  subject to a tax of 30%, which can be decreased or increased (up to  150%) if
the executive deems it necessary.137  Exports may be exempt from this tax according to their
destination. The authorities noted that these taxes are usually not applied.   Export taxes in 1997 are
estimated to have amounted to R$202 million.138  Export taxes are based on f.o.b. or, less often, on
minimum export prices.
128. All exports are exempt from the I ndustrialized Products Tax (IPI) and ICMS.
                                                     
132 WTO document WT/GC/W/271, 26 July 1999.
133 Câmara de Comércio Exterior – CAMEX, Informações Úteis [Online].  Available at:  http://www.
planoalto.gov.br/camex/I tem4a.htm [18 January 2000].
134 O que você quer saber sobre exportação:  Informações básicas [Online]. Availble at: http:www.
mdic.gov.br/seces/ scxindex/htm, [16 January 2000].
135 Comunicado DECEX No. 32 , 4 November 1997.
136 WTO document G/TMB/N154, 16 July 1996;  and O que você quer saber sobre exportação:
Informações básicas [Online].  Available at:  http :www.mdic.gov.br/seces/scxindex/htm [16 January 2000].
137 Law No. 9.716, 26 November 1998.
138 IBGE (1999).Brazil WT/TPR/S/75
Page 57
129. Minimum exports prices are not used, except as a base to calculate export taxes.
(iii) Export prohibitions and other restrictions
(a) Export prohibitions
130. Exports of some organic chemicals included in HS Chapter 29 are prohibited for non-member
countries of the Montreal Protocol.139  Exports of "jacarandá da Bahia" (HS4407.29.90) are prohibited
because this wood is becoming extinct.  Brazil also restricts exports to comply with United Nationsresolutions (section (2)(v)(a)).
(b) Export quotas
131. In 1996, export quotas were in place for tin, sawn wood, coffee, and cocoa.  The authorities
noted that the export quotas for coffee and cocoa have since been eliminated.  An export quota on
sugar was dropped in 1997.  Exports of certain woods (pine, imbuia, mogno and virola) are subject toquotas.
(c) Voluntary restraints
132. The Governments of Brazil and the United States signed an agreement suspending the
countervailing duty investigation on hot-rolled flat-rolled carbon quality steel from Brazil, effective
from October 1999 until September 2004.  The agreement suspends the countervailing duties thatwould have been applied to sales of the product destined to the United States, and establishes an
annual limit of 295,000 tonnes.
133. In 1994 the European Union offered preferential tariff quotas (i.e. zero tariff) on some
Brazilian products, including pork meat, bovine meat (quota Hilton), and poultry.  These tariff quotas
were integrated into the concessions negotiated by the European Union during the Uruguay Round,
and extended to other WTO Members.
140
134. Brazilian exports of textiles and clothing are subject to quotas in the Canadian, European
Union, and U.S. markets.  Canada and the United States have notified to the WTO their respective
administrative arrangements with Brazil order to implement the textiles and clothing restraints.141
(iv) Export cartels and other arrangements
135. The authorities indicated that no export cartels are in place.  The export cartel held by
PETROBRAS was dismantled in 1998.
                                                     
139 These products are: Carbon tetrachloride (2903.14.00), Trichloroethane (methyl chloride)
(HS 2903.19.10), Trichlorofluormethane (HS 2903.41.00), Dichlorodifluormethane (HS 2903.42.00),Trichlorotrifluorethane (HS 2903.43.00), Dichlorotetrafluorethane and Chloropentafluorethane(HS 2903.44.00), Chlorotrifluormethane (HS 2903.45.10), Pentachlorofluorethane (HS 2903.45.20),Tetrachloroficluorethane (HS 2903.45.30), Heptachlorofluorpropane (HS 2903.45.41),Hexachlorofifluorpropane (HS 2903.45.42), Pentachlorotrifluorpropane (HS 2903.45.43),
Tetrachlorotetrafluorpropane (HS 2903.45.44), Trichloropentafluorpropane (HS 2903.45.45),
Dichlorohexafluorpropane (HS 2903.45.46), Chloroheptafluorpropane (2903.45.47), and Bromotrifluormethane,dibromotetrafluorethane and bromochlorodifluormethane (HS 2903.46.00).
140 Ministry of Development, Industry and Trade (1999).
141 WTO documents G/TMB/N/154, 16 July 1996, and G/TMB/N/265, 22 July 1997.WT/TPR/S/75 Trade Policy Review
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136. In May 2000, an agreement to limit coffee supplies and increase world prices was signed by
Brazil and other producers, including members and non-members of the Association of Coffee
Producing Countries (Chapter IV(2)).142  In June 2000, Brazilian producers agreed to retain 20% of
the quantity to be exported.143
(v) Export subsidies
137. Brazil has notified WTO Members that during 1995-98 it did not grant export subsidies to
agricultural products.144  The authorities noted that no subsidies have been granted subsequently.
(vi) Export support
138. In 1996, Brazil notified the following programmes under Article XVI:1 of the GATT 1994
and Article 25 of the Agreement on Subsidies and Countervailing Measures:  Export Financing
Programme (PROEX), Special Export Programmes (BEFIEX), Steel Industry, Regional Incentives(SUDAM/SUDENE), FINAM/FINOR, Constitutional F unds, Industrial Technology Development
Programme, Financing of Studies and Projects, National Fund for Scientific and Technological
Development.
145  In 1997, Brazil notified another fiscal incentive for regional development.146  Brazil
has made no further notifications on export subsidies, due in June 1997 (update), June 1998 (new and
full notification), and June 1999.147
139. The authorities stated that since 1996 no modifications have been made to the rules or
benefits conceded under BEFIEX, whose objectives are to increase exports of manufactured products
and net foreign exchange earnings.  Currently, the Ministry of Industry, Commerce and Tourism is
responsible for the administration of these programmes.  No new contracts have been approved
since 1990, thus only benefits under existing contracts have been granted during the period.  The
programmes were to be phased out in 1999 but the legislation allowed, under specific circumstances,
for the deferral of the terms of the contracts.  Thus the validity of some projects was extended forthree more years (i.e. until 2002), after which BEFIEX should be terminated definitively.
140. The BEFIEX programmes allowed for the concession of fiscal incentives through the
exemption or reduction of import duties and of the IPI on the imports of machinery, equipment and
accessories;  and the exemption or reduction of import duties and the IPI on the imports of raw
materials, intermediate products and inputs for replacement parts.  Imports are also exempt from theAdditional Contribution on the Freight for Re novation of the Merchant Marine (AFRMM).
Decree-Law No. 2.433 limits the scope of these bene fits by establishing stricter sectoral export
performance targets and by requiring a global foreign exchange balance for each company, taking into
account programmes other than BEFIEX (such as drawback) (Table III.14).
                                                     
142 Financial Times , 19 May 2000.
143 Interministerial Portaria MDIC/MA No. 197, 15 June 2000.
144 WTO documents G/AG/N/BRA/5, 23 August 1996;  G/AG/N/BRA/9, 1 August 1997;
G/AG/N/BRA/12, 3 August 1998;  and G/AG/N/BRA/15, 19 October 1999.
145 WTO documents G/SCM/N/3/BRA, 18 March 1996, and G/SCM/N/16/BRA, 5 July 1996.
146 WTO document G/SCM/N/16/BRA/Suppl.1, 23 January 1997.
147 WTO document G/SCM/23, 30 July 1999.Brazil WT/TPR/S/75
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Table III.14
Export performance targets by sector
Sector US$ million/year
Cars and light commercial vehicles 100
Non-ferrous metallurgy 100
Buses and trucks 60
Electric home appliances 55
Paper and cellulose 45
Non-serialized capital goods 40
Autoparts 35
Electric and electronic components 30
Footwear 30
Wheel tractors, crawler tractors, tillers, combines, loaders and backhoes 30
Serialized capital goods 25
Textiles 20
Others 20
Source: Government of Brazil .
141. BEFIEX incentives were granted to firms that export industrial goods.  The maximum limit
that firms were authorized to import in terms of machinery, equipment and inputs, with exemption or
reduction of taxes, was established contractually.  Beneficiaries of the programme negotiate with the
relevant authorities a specific level of exports (f.o.b. value) and of net foreign exchange earnings tohave the right to import with fiscal incentives.  The import of inputs is, nevertheless, limited to one
third of the f.o.b. value of exports, with the exception of imports made under special customs regimes
such as drawback.
142. In 1996, fiscal incentives granted under the BEFIEX programme amounted to
US$102.3 million, representing an average incentive of US$307,200 per programme.  In 1997, thevalue of fiscal incentives granted was of US$59.7 million, and the average incentive per programme
was US$249,800 (Table III.15).
Table III.15
Fiscal incentives granted under BEFIEX
Year Number of contractsAmount
(US$ million)
1992 502 297.96
1993 427 199.17
1994 395 218.83
1995 351 146.0
1996 333 102.3
1997 239 59.7
1998 190 23.5
1999 158 14.5
2000 50 ..
2001 34a..
2002 31a..
2003 0 0
.. Not available.
a Expected number of programmes to remain.
Source: Government of Brazil.WT/TPR/S/75 Trade Policy Review
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(vii) Duty and tax concessions
(a) Drawback
143. The only modification to Brazil's drawback sy stem since 1996 has been a simplification of
procedures;  no changes affect the benefits.148  This system provides for the suspension or exemption
of import taxes, IPI, ICMS, AFRMM and other taxes, when the imported goods are used to produce
exportables or to package them.149  As a guideline, to receive those benefits, the f.o.b. value of exports
is expected to be at least 40% higher than the imported inputs.
144. The drawback system in intrabloc trade (i.e. intra-MERCOSUR) was extended to the
year 2000.150
(b) Special System of Industrial Depots subject to Standardized Controls (RECOF)
145. The Special System of Industrial Depots subj ect to Standardized Controls (RECOF) was
instituted in 1997, as a means of reducing the cost of exportables.151  This system suspends the
payment of import taxes and the IPI on merchandise imported for purposes of industrialization and
production of goods for the export market.152  The period of the suspension is one year, with the
possibility of an extension for one additional year.153
146. In 1998, the conditions governing the use of the Special System of Industrial Depots under
Unified Control (RECOF) were redefined.154  Industrial companies with net worth of more than
R$2 million (US$1.1 million) qualified to operate in the RECOF framework, provided that they
commit themselves to export at least R$20 million (US$10.9 million)  over the first three years under
the system, and R$40 million (US$21.7 million)  as of the fourth year.  A maximum of 20% of the
value of the imported merchandise may be sold in the domestic market without undergoing
industrialization.155
(c) Export processing zones
147. Since 1996, no modifications have been made to the legislation on export processing zones
(EPZs).  Firms operating in the EPZs must export 100% of their production. Benefits conceded to
companies established in EPZs include duty and other tax exemptions.156  Imports may enter EPZs
exempt of duties and other taxes.  Exchange restrictions were also relaxed for imports into the EPZs.
148. The installation of 18 EPZs has been authorized;  however, none of them is yet in operation.
No other EPZ has been operational since 1994.  The authorities noted that this is largely because
producers have found that selling in the Brazilian market is more attractive than abroad.
149. Within MERCOSUR goods produced in EPZs are considered extra-zone.
                                                     
148 SECEX Directive No. 01, 21 January 2000, and DECEX Communiqué No. 02/2000.
149 DECEX Communiqué No. 21, 11 July 1997.
150 SECEX Circular No. 43, 21 December 1998 in Central Bank (1998).
151 Decree No. 2.412, 12 March 1997.
152 Normative Instruction SRF No. 35, 2 April 1998.
153 Central Bank (1997).
154 Normative Instruction of the Secretariat of Federal Revenue (SRF) No. 35, 4 February 1998.
155 Central Bank (1998).
156 Decree-Law No. 2.452, 29 July 1988;  Law No. 8.396; 2 January 1992;  Decree No. 846,
25 July 1993;  and Decree No. 1.679, 18 October 1995.Brazil WT/TPR/S/75
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(viii) Export finance, insurance, and guarantees
(a) Export Financing Programme (PROEX)
150. The objective of PROEX, established in 1991, is to increase Brazilian exports by facilitating
access to export financing, in particular of goods that require medium- and long- term loans.  The
Export Credit Committee (CCEX), comprising the Ministries of Industry, Commerce and Tourism
(SECEX), and of Finance (Nationa l Treasury Bureau), is in charge of managing this programme.
151. PROEX provides export credits to Brazilian exporters through direct financing or interest rate
equalization payments.  The interest rate equalization scheme is granted to the exporter (supplier)
and/or importer (buyer) of a wide variety of goods, inter alia , agricultural goods, machinery,
equipment, durable goods, and services.157  Equalization levels are based on the maturity of each
specific loan, varying from one to ten years, and 15 years for aircraft.158  Direct financing, available to
some activities as the interest rate equalization159, is granted by the Brazilian Government to
the exporter (supplier's credit), or directly to the importer (buyer's credit) for payment to the
exporter.  The programme does not have an expiry date;  it is contingent on export taking place and on
local-content requirements.160  Exports with a domestic content of 60% or more are eligible for
interest rate equalization payment on 85% of their value;  for goods with a domestic content of lessthan 60%, the percentage eligible for interest rate  equalization is reduced according to the percentage
of national content.
152. Since 1996, constant revisions have been made to PROEX:  interest equalization to finance
export production was allowed although no regulations have been enacted;  exports supported could
be financed using both financing and interest equalization;  exports under PROEX financing were
permitted to use Export Credit Insurance (SCE); the coverage of eligible goods was also modified and
consolidated;  maximum percentages applicable to interest equalization were reduced;  the payment ofinterest equalization of up to 100% of the export value was allowed (later reduced to 85%);  the
maximum term for the payment of a number of products was reduced from 180 to 60 days, or
lower.
161
153. Between 1995 and 2000 actual expenditure under PROEX was well below the total amount
budgeted (Table III.16).  Nevertheless, expenditures in this programme have increased since 1995.Moreover, at the end of 1998, PROEX coverage was expanded by opening the credit modalities to
cover some 94% of all lines in Brazil’s tariff schedule and more than 80% of exports;  according to
the authorities 15% of all exports benefited from PROEX.
162
154. Since Brazil's previous Review, PROEX equaliza tion payment as applied to export financing
of regional aircraft has been the subject of a dispute under the WTO dispute settlement mechanism.Canada and Brazil held consultations on 22 and 25 July 1996 regarding the export financing
programme for aircraft, but failed to reach a mutually satisfactory solution.  On 16 September 1996,
                                                     
157 Portaria No. 374, 21 December 1999.
158 WTO document WT/DS46/R, 14 April 1999.
159 Portaria No. 375, 21 December 1999.
160 WTO document G/SCM/N/3/BRA, 18 March 1996.
161 Provisional Measure No. 1.574, 05 December 1997, currently in force under No. 1.994-39,
11 May 2000.  Resolutions No. 2.490, 30 April 1998;  an d CMN Nos. 2.575, 17 December 1998, and 2.576, 17
December 1998.  MICT Directives Nos. 33 and 34, 8 April 1997; 53, 8 May 1997;  83, 10 July 1997;  7,13 January 1998;  23, 19 February 1998;  146 and 14 7, 28 December 1998;  and 374 and 375, 21 December
1999.  BACEN Circular Letter No. 2.881, 19 November 1999.
162 MICT Directives Nos. 146 and 147, 28 December 1998;  and Central Bank (1998).WT/TPR/S/75 Trade Policy Review
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Canada made its first request for the establishment of a panel.163  In the event, a panel was established
on 23 July 1998.164  The European Communities and the United States reserved their rights to
participate in the panel proceedings as third parties.165
Table III.16
Level of expenditure under PROEX, 1994-2000
(US$ million)
Year PROEX budget Actual expenditure
1994 981.38 121
1995 1,069.79 124
1996 495.08 184
1997 834.43 353
1998 1,263.01 538 (Jan-Oct)
1999 1,200.00 684
2000 916.00 629
Source: WTO document WT/DS46/R, 14 April 1999;  and Government of Brazil.
155. The Panel found that payments on exports of regional aircraft under the PROEX interest rate
equalization scheme are export subsidies inconsistent with Article 3 of the Agreement on Subsidies
and Countervailing Measures (SCM Agreement).166  The Panel concluded that Brazil should withdraw
the subsidies within 90 days.167  In May 1999, Brazil appealed certain issues of law and certain legal
interpretations developed by the Panel. 168  In this case, the Appellate Body found the measures under
review to violate the SCM Agreement and upheld the recommendation of the Panel that Brazil
withdraw the export subsidies for regiona l aircraft under PROEX within 90 days.169
156. As a result, in 1999 Brazil stipulated that the financing of commuter aeroplanes regarding
equalization would be established operation by operation, on levels that could be differentiated
preferentially, using as a reference the ten-year U.S. Treasury Bond, with a spread of 0.2% per year,which is reviewed periodically.
170  In addition, the Central Bank of Brazil (BACEN) modified the
maximum percentages applicable to interest equalization in PROEX, which ranged from 1% to 3.8%
in early 1999, to a range of 0.5% to 2.5%.171  Despite these changes Canada claims that Brazil did not
phase out the subsidy by the scheduled date172;  a Panel agreed with Canada.173  Brazil appealed this
decision.174
(b) FINAMEX/BNDES EXIM
157. Created in 1990, the Finance Programme for Exports of Machinery and Equipment,
FINAMEX (today BNDES EXIM), is a programme operated by FINAME, a subsidiary of the
BNDES.  There are two modalities of financing:  pre-shipment, which finances the production of
goods to be exported, and post-shipment to finance the marketing of the products abroad.
                                                     
163 See WTO documents in series WT/DS46.
164 WTO document WT/DS46/5, 13 July 1998.
165 WTO document WT/DS46/6, 19 August 1998.
166 WTO document WT/DS46/R, 14 April 1999.
167 WTO document WT/DS46/R, 14 April 1999.
168 WTO document WT/DS46/8, 3 May 1999.
169 WTO document WT/DS46/AB/R, 2 August 1999.
170 CMN Resolution No. 2.667, 19 November 1999.
171 Central Bank Circular Letter Nos. 2.843, 25 March 1999, and 2.881, 19 November 1999.
172 WTO document WT/DS46/13, 26 November 1999.
173 WTO document WT/DS46/RW, 9 May 2000.
174 WTO document WT/DS46/17, 22 May 2000.Brazil WT/TPR/S/75
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158. Until 1996, FINAMEX was limited to financing Brazilian exports of machines and
equipment.  In 1996, the range of operations under the programme was expanded, enabling it to
finance exports of engineering, assembly and installation services associated to the sale of exported
goods.  The list of products eligible for financing was expanded to include:  metal manufactures, tools
and diverse metal artefacts, machines, electric appliance equipment, consumer electronics, auto
parts, parts and components, transportation material (except automobiles);  instruments and apparatus;pre-fabricated constructions;  and software.
159. A new operational modality, called the "pre-shipment special" was created in 1997 to finance
the production of goods to be exported during the pre-shipment phase.  This type of financing can be
used only if there is an increase in the value of exports.  Thus, the value to be financed under this
modality is limited to the difference between the value of the exports to be made in the following12 months, compared with those made in the previous 12 months.
160. The range of products eligible for financing was again expanded in 1997 to include all
exportable products, except for automobiles, and products with lesser aggregate value, such as
cellulose, sugar and alcohol, grains, orange juice, minerals, and live animals.  Intermediate products to
be financed were also defined.  These included:  common steels (finished products); special steels(finished and semi-finished products); basic metals (finished copper and aluminum products and other
metal products in general); iron alloys; mineral products (decorative stone plates and their
derivatives); inorganic chemicals (titanium dioxide and peroxides); fine chemicals (pharmaceutics,
catalyzers, agricultural defensives and dyes);  and petrochemicals (final products).
(c) Export insurance and guarantees
161. The Brazilian Export Credit Insurance Company S.A. (SBCE) is a private company created
in 1997 to provide export credit insurance.
175
162. Guarantees for political and extraordinary risk, and trade risk insured by the SBCE are
granted by the Reinsurance Institute of Brazil S.A. (IRB).  These guarantees are funded through the
Export Guarantee Fund (FGE) created in 1997.176  The Fund covers the guarantees rendered by the
Federal Government for the total term of the operati on in the case of political and extraordinary risks,
and for periods in excess of two years in cases involving commercial risk.177  Export credit coverage
granted by the Government, through the IRB, is limited to a maximum of 85% in the case of
insurance against trade risk, or a maximum of 90% in the case of insurance for political and
extraordinary risk.
163. In 1997, the Competitiveness Promotion Guarantee Fund (FGPC) was created as a fund to
guarantee the risk of financial operations undertaken by the BNDES and FINAME when financingmicro, small, and medium-enterprises that expo rt, produce inputs to manufacturer, assembly or
package exports, or engage in projects to increase their competitivity.
178  The FGPC is to guarantee
financing operations to increase competitiveness through installation, expansion, modernization or
relocation, as well as, to finance export production.  Each financing operation could be guaranteed,
using FGPC funds, for up to 70% of its value, increased to 80% in 1999.179
                                                     
175 Decree No. 2.369, 10 November 1997.
176 Provisional Measure No. 1.583-1, 25 September 1997 later Law No. 9.818, 23 August 1999.
177 Provisional Measure No. 1.583-1, 25 September 1997.
178 Law No. 9.531, 10 September 1997 regulated by Decree No. 2.509, 9 March 1998.
179 Decrees Nos. 2.509, 9 March 1998, and 3,113, 6 July 1999.WT/TPR/S/75 Trade Policy Review
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(ix) Export promotion and marketing assistance
164. In the past three years, the New Export Development Areas Programme (PNPE) has
continued in its primary objective to increase Brazilian exports.  The programme is aimed at
promoting marketing activities so that enterprises, especially small and medium-sized companies, are
able to export.  Export and market diversification is another goal of this programme.
165. The Export Promotion Agency (APEX) was created in 1997 to support the export initiatives
of micro-enterprises.  This is within the framework of the Brazilian Service of Support to Micro
Businesses (SEBRAE).180
166. In 1998, the Government initiated the Special Export Programme, coordinated by the
Chamber of Foreign Trade.  The Programme covers 55 export sectors, representing almost 90% of
Brazil’s 1997 foreign sales.  The objective of the programme is to identify factors that have hinderedexports, principally in the areas of financing, trade promotion, and logistics.
181
(x) Export performance requirements
167. Benefits under BEFIEX and PROEX are linked to the quantity or value of exports.  Certain
duty and tax concessions for the automotive industry depend upon the export performance of the
benefiting firm.  Fiscal incentives provided under regimes such as the RECOF and the drawback arealso subject to export performance.
(4) M
EASURES AFFECTING PRODUCTION AND TRADE
(i) Competition policy and regulatory issues
(a) Competition policy
168. Competition policy has become increasingly important in Brazil as privatization has moved
forward and foreign direct investment surged (secti on (ii) below and Chapter I(3)).  Since 1996, the
number of mergers and acquisitions has increased significantly:  from 40 in 1996 to 398 in 1999.Reflecting this, complaints received by the Administrative Council for Economic Defence (CADE)
increased by 70% in 1998 and continued to increase in the first half of 1999.  The sectors most
affected by uncompetitive practices have been education and cement.  The most common complaints
in 1998 regarded cartels and tie-in sales.
182  A recent high profile case dealt with by the Brazilian
System for Protection of Competition (SBDC) c oncerned the merger of Brazilian drink-makers
Brahma and Antarctica.  The merger was Brazil's largest ever, and had raised concerns about its
effects on competition as the new combined firm (AmBev) will control some 65% of the domestic
beer market.
169. Brazil's competition policy legislation is Law No. 8.884 of 1994.  There have been no major
changes to the legislation since Brazil's previous Review.  CADE, the Secretariat for Economic Law(SDE), and the Secretariat for Economic Monitoring  (SEAE) constitute the Brazilian System for
Protection of Competition (SBDC).
183  CADE was established in 1962 as an autonomous agency
linked to the Ministry of Justice;  the SDE was created in 1991 as a decentralized body of the Ministry
of Justice;  the SEAE comes under the Ministry of Treasury.  The SDE has authority to investigate
                                                     
180 Decree No. 2.398, 21 November 1997;  and Central Bank (1997).
181 Central Bank (1998).
182 Ministry of Justice (1999).
183 OAS (undated).Brazil WT/TPR/S/75
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any irregularities in an economic sector and to open administrative proceedings accordingly.  The
SDE receives technical support from the SEAE during an investigation.
170. Brazilian legislation prohibits any practice aimed at restricting, limiting, or prejudicing free
competition;  dominating the relevant market of goods or services;  arbitrarily increasing profits; or
abusively exercising dominant market position.  The law lists a wide range of horizontal and vertical
restraints that are prohibited.  Anti-competitive practices are examined on a case-by-case basis.  Thereare no per se offences.  Irrespective of fault, all forms of conduct are considered illegal if they have
the potential to bring about anti-competitive effects.
171. No industries are exempt from the provisions of the Law No. 8.884.  However, in some
sectors, such as public utilities, the Government considered that there were issues that required a
specialized approach.  For those sectors specific regulatory agencies were created, inter alia , in
energy, telecommunications, and gas and petroleum.  In these cases, the regulatory agencies and the
competition authorities, consider jointly the issues  involving competition.  The provisions of Law
No. 8.884 do not apply to dumping and subsidies cases addressed in the WTO Agreements on the
Implementation of Article VI of GATT 1994 and the Agreement on Subsidies and Countervailing
Measures, unless the country affected is not a WTO member.
172. Brazilian legislation also provides for the monitoring of all acts and contracts that may limit
or in any way harm free competition or result in the dominance of relevant markets of goods or
services.  These acts include those expressly aimed at any type of economic concentration, be itthrough merger or incorporation of firms, chartering of corporation or partnerships to exercise control
of a firm, or any type of corporate organization.
173. In order to avoid economic concentration and hindrance of free competition, the following
acts are subject to CADE's approval:  mergers and acquisition of companies or any other form of
corporate grouping that could result in a company holding 20% of the relevant market, or when any of
the parties has registered annual gross billings of approximately R$400,000 million on the latest
balance sheet for any market participants.  Since the law does not define the concept of relevant
market, it is up to the company to do it.  Therefore, the authorities noted that in 90% of the cases the"relevant market" criterion is not used.  Instead the criterion used is that of annual gross billings.
174. Mergers and acquisitions are approved without conditions when there is no harm to free
competition in the market.  If it entails economic concentration, an operation may be approved whenthis is in the public interest.  The authorities noted that this exception has never been used.
175. The SBDC has full authority to apply competition laws in cases of privatization of
state-owned assets and the granting of private concessions.
184  However, concerns were expressed in
the past about delays and excess bureaucracy in the evaluation of cases.  For instance, the SEAE is
required to issue an opinion within 30 days, but there is no sanction for delay.  The SDE is similarly
required to complete its review within 30 days, but often take substantially longer.
176. According to the SDE, its perf ormance has improved remarkably since 1997:  for instance,
during 1997-98 the average time to analyse cases regarding collusive practices decreased by 60%, asimilar performance occurred in analyses of uncompetitive practices.
185  C A D E  h a s  a l s o  m a d e
progress in expediting its case analyses, introducing a simplified procedure for simple cases.  The
number of documents requested was cut from 43 to 9.186
                                                     
184 This paragraph is based on Rowat et. al. (1997).
185 Ministry of Justice (1999).
186 OAS (undated).WT/TPR/S/75 Trade Policy Review
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177. The MERCOSUR Competition Protocol was approved in December 1996.  The Protocol has
been ratified by the Brazilian Congress.
(b) Pricing arrangements
178. No new price controls have been introduced since 1996.  Since then, liberalization of the price
controls affecting energy products (i.e. oil and alcohol products) has continued (Table III.17).  Law
No. 9.478 of 6 August 1997 established a period of 36 months, as of 6 August 1997, to liberalize theoil market at all levels of production and marketing but the schedule of liberalization was
subsequently prolonged.  Simultaneously, as a result of Law No. 9.478, the price of several oil
products, for instance oil refined domestically, was liberalized.  In addition, a new formula was
established to determine the price effectively received by PETROBRAS refineries for gasoline for
automobiles, diesel, liquid propane gas, petrochemical naphta, aviation fuel and combustible oils.
Table III.17
Price liberalization of oil products and alcohol, 1996-99
Product Year Comment
Gasoline for automobiles 1996 Gradual liberalization of the distributor's price and the final price of gasoline for
automobiles began.
The price at the refinery remained controlled.
1998 A new formula was established to determine the (price effectively received by
PETROBRAS' refineries).
Aviation fuel (QAV) 1996 Prices at the distributor and consumer level were liberalized in 85% of the
market.  The price remained controlled for small airports (i.e. 15% of the
market) located far away from supply centers.
The price at the refinery continued to be fixed by the Government through the
use of a formula based on the U.S. Gulf price.
1998 A new formula was established to determine the (price effectively received by
PETROBRAS' refineries.
Alcohol 1996 Gradual liberalization of the price to distributors and the final price.
Producer's price remained controlled.
1997 Subsidies on the costs of freight of (anhydrous alcohol) and (hydrous alcohol)
were partially eliminated.
1998 Prices of (hydrous alcohol ) were liberalized, except in the State of Amapa
where prices were liberalized on February 1999.
Liquid propane gas 1996 The controls on the cost of freight, and of the margins of commercialization and
resale were eliminated.  The prices of LPG at the refinery and at the final level
continued to be fixed.
1998 Final prices were liberalized.
1998 A new formula was established to determine the price effectively received by
PETROBRAS' refineries.
Diesel 1997 The process of liberalizing the costs of transportation and the margins of
commercialization of diesel began.The price of diesel sold directly to large consumers was liberalized.
1998 A new formula was established to determine the price effectively received by
PETROBRAS' refineries.
Refined oil 1998 Price was liberalized.
Asphalt 1997 The price of asphalt at the wholesale and retail levels was liberalized, and the
price at the refinery level was pegged to the U.S. price.
Source : Government of Brazil.
179. The producer price equalization (PPE) mechanism, related to the Petroleum Account is still in
force.  The PPE functions as buffer to cushion fluctu ations of the international price of oil and of the
exchange rate, thus hindering brusque variations in the domestic prices of oil products, given that the
prices effectively paid to the refineries are based on the international price.Brazil WT/TPR/S/75
Page 67
180. Price support is still in force for agricultural products based on the Policy of Guaranteed
Minimum Prices (PGPM) using the two mechanisms detailed in Secretariat Reports for Brazil's
previous Reviews:  the Federal Government  Acquisition Programme (AGF) and the Federal
Government Loans Programme (EGF) (Chapter IV(2))).  The minimum prices are based on several
parameters, inter alia , present and future expected conditions of the domestic and international
markets of commodities;  costs of production;  volume of the national stocks;  and the profitability ofthe previous crop.  Products benefiting from minimum prices in 1996-99 included cotton, beans,barley, garlic, sisal, soya, sorghum, and wheat.
181. The authorities noted that since the 1996/1997 harvest the use of the PGPM is neither
automatic nor universal.  For instance, interventions through the AGF are now planned and the
programme is used only in regions that require assistance.  The EGF with sale option has been phased
out.
(ii) State-owned enterprises, privatization, and state trading
182. The Brazilian Privatization Programme (PND), in itiated in 1990 to reduce the size of the
public sector and improve its fiscal balances, has continued.
187  Other objectives of the PND are the
redefinition the role of the public sector in the economy, and the restructuring of the private sectors sothat the public sector participates only in activities deemed essential for achievement of national
priorities.
188  The National Privatization Council was created in 1995 to streamline decision-making
and implementation regarding the privatization process.  The Brazilian Development Bank (BNDES)is in charge of the actual sales.
183. During 1996-99 privatization (i.e. PND, telecommunications, and state companies)
progressed rapidly with proceeds amounting to some US$76 billion (Table III.18).  In its initial stages
privatization was concentrated in the industrial and mining sectors.  During 1996-97, state-owned
enterprises were sold in sectors such as fertiliz ers, steel, petrochemicals and mining;  the latter
included the conglomerate Companhia Vale do Rio Doce (CVRD).  Privatization in the services
sector started in 1997 with the railroad system and telecommunications services (including mobile
telephones).
189  Telecommunications accounted for 42% of total privatized assets between 1996
and 1999, electricity accounted for 39%, mining for 9%, transportation for 4%, and gas/water
treatment for 3%.  Power utilities and gas, ports, highways, sanitation, a reinsurance company, andseveral banks are in the process of privatization.
Table III.18
Results of the Privatization Programme, 1996-2000(US$ million)
Sector Sales proceeds Debt transferred Aggregate results
Agriculture .. .. ..
Manufacturing 3,511 3,643 7,154
Services 58,061 10,254 68,351
Total company sales 61,573 13,897 74,469
Sales of minority shareholdings 706 .. 706
Overall sales 1996/99 62,277 13,897 76,175
Overall sales 1991/2000a72,896 17,918 90,815
.. Not available.
a Estimated.
Source: Government of Brazil.
                                                     
187 WTO (1997a).
188 Law No. 9.491, 9 September 1997.
189 BNDES (2000).WT/TPR/S/75 Trade Policy Review
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184. Divestiture at the state level started only after 1996 with the agreements to restructure the
state debt, which included specific provisions for the sale of assets owned by States.  During 1996-99
proceeds from privatization at the state level reached some US$25 billion.  In the same period the
PND (i.e. mining, petrochemicals, electricity, transportation, and others) collected US$10 billion, and
privatization of the telecommunication sector resulted in proceeds of US$26.7 billion.  Foreign direct
investment has played an important role in the process of privatization (Chapter I).  In 1995, foreigncapital invested in state-owned companies amounted to 5%, increasing to 44% in 1999.  The major
investor was the United States, accounting for 34% of all FDI, followed by Spain (27%).
185. Despite the progress in the area of privatization, the State still controls a significant number of
entities involved in the production of goods and services.  In early 2000, there were around 96 state-
owned enterprises covering a wide range of activities:  electricity, petrochemicals, port services,transportation services, and health services.
186. In its last notification to WTO Members under Article XVII of the GATT 1994 (activities of
state-trading enterprises) and the Understanding on the Interpretation of Article XVII, Brazil reported
ten enterprises.
190  In early 2000, Brazil was yet to make further notifications under those provisions,
including notifications due in 1998 (full) and 1999 (update).191
187. Of the firms notified in 1996 and also described in the Secretariat Report for Brazil's previous
Review, Florestas Rio Doce S.A and CVRD were privatized in 1997.192  The privatization of COBRA
(Computadores e Sistemas Brasileiros S.A.) was not successful.  No information was available on
changes since 1996 affecting the ownership structure of PETROQUISA (Petrobrás Química S.A.),
ITAIPU (hydro-energy producer) or CMB (Casa da Moeda do Brasil).  INB (Industrias Nucleares do
Brasil S.A., INB) may not be privatized as its monopoly rights are granted by the Constitution.
188. There are no plans to privatize CONAB (Companhia Nacional de Abastecimento), although
its storing facilities are being sold to private in terests (Chapter IV(2)).  Neither are there plans to
privatize Petrobrás Distribuidora S.A. (BR Dist ribuidora), a PETROBRAS subsidiary, and the only
company that produces and commercializes lubricants and fuels in the whole Brazilian territory.
PETROBRÁS was the sole importer and export er of oil products until 1998 (Chapter IV(4)).
(iii) Incentives
(a) Regional programmes
189. Geographic preferences consist of tax benefits for investment in less developed parts of the
country, such as the north-east and the central-west, with equal application to foreign and domestic
investors. These benefits seem to have had little impact on foreign investment decisions;  most foreign
investment remains concentrated in the more industrialized southern part of Brazil.  Somemunicipalities provide land on favorable terms for industrial development.
193
190. Given the differences in the level of economic development across regions, the
Federal Government created in the 1960s a comp ensatory mechanism for the development of the
north, north-east and central-west regions.  These regional incentives are administered by
Superintendency for the Development of the Am azon Region (SUDAM) and Superintendency for the
Development of the Northeast (SUDENE), which are autonomous federal entities linked to the
                                                     
190 WTO document G/STR/N/1/BRA, 21 March 1996.
191 WTO document G/STR/W/36, 8 October 1999.
192 WTO document G/STR/N/3/BRA, 11 December 1997.
193 Department of Commerce (1999c).Brazil WT/TPR/S/75
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Ministry of Planning and Budget.  Their objective, inter alia , is to evaluate and approve projects of
interest to the development of the region and to grant fiscal benefits or financial cooperation
accordingly.  The duration of these benefits is indeterminate.194
191. The fiscal benefits in the form of income tax exemption or income tax reductions are granted
to industrial or agricultural firms located in the Legal Amazon or north-east regions.195  Eligible firms
must be classified as being of interest to regional development.
192. Financing to support the development of the Amazon and north-east regions is provided
through the Investment Fund of the Amazon (FI NAM) or the Investment Fund of the Northeast
(FINOR) by means of underwriting of convertible and non-convertible bonds.  The benefits are
granted to any enterprise, located in the Legal Amazon or north-east region, that can generate jobs and
income for the region.  However, private sector projects directed towards agriculture and cattlebreeding, agro-industry, tourism, fishing, forest ation/reforestation, energy, transportation and
communications are considered a priority.  Projects that can be financed by FINAM or FINOR
include:  preliminary and complementary construction;  civil construction, infrastructure equipment
(including its setup);  infrastructure, machinery, equipment and devices (including their setup);
vehicles and vessels;  acquisition of know-how;  furniture and utensils;  preparation of area and soilfor plantation;  acquisition of seeds and seedlings for transplant;  installation of nurseries and clone
gardens;  plantation, agricultural and cattle installations;  and acquisition of animals (including
semen).  SUDAM and SUDENE administer this programme.
196
193. In 1989, three Constitutional Funds (FNE, FNO and FCO) were created to grant
concessionary financing to different sectors in the north, north-east and mid-west regions.
The objective of these funds is to contribute to the social and economic development of the north,
north-east and mid-west regions.  Federal regional financial institutions provide concessionary loansat long-term interest rates (TJLP) plus an annual charge of 6% to finance sectoral programmes in
conformity with the respective regional development plans.
197  The administration of each of these
funds is different and autonomous, and is the responsibility of different financial institutions.198
194. In addition, BNDES administers four regional programmes:  the Northeast Competitive
Programme (PNC);  the Integrated Amazon Basin Programme (PAI);  the Midwest Programme(PCO);  and the Programme for the Reconversion of the South (RECONVERSUL Programme).  Their
objective is to increase investments in the least developed areas of the country.  These programmes
are scheduled to be phased out as follows:  th e PNC by 2002;  the PAI and the PCO by 2000;  and
RECONVERSUL by 26 April 2003.
195. In 1997, Brazil notified to WTO Members the introduction of a provisional programme
granting fiscal incentives to any enterprise in th e automotive sector located in the north, north-east
and central-west regions of Brazil (i.e. fiscal incentives for regional development).
199  T a x
concessions and fiscal incentives are granted to producers in the automotive sector in the form of
tariff reductions, industrial taxes reductions, (e.g. exemption of the IPI on the acquisition of
machinery and equipment;  industrial and quality control instruments;  and inputs for replacementparts and accessories;  reduction of the IPI on the acquisition of raw materials, parts, and pneumatics)
                                                     
194 WTO document G/SCM/N/3/BRA, 13 March 1996.
195 The Legal Amazon includes the States of Amazonas, Romina, Amapá, Pará, Tocantins, Rondania,
Mato Grosso, and part of Maranhão.
196 WTO document G/SCM/N/3/BRA, 13 March 1996.
197 TLJP rates were 11.02% in 1996, 9.89% in 1997, 18.06% in 1998, and 12.50% in 1999.
198 WTO document G/SCM/N/3/BRA, 13 March 1996.
199 Provisional Measure No. 1.532, 18 December 1996.WT/TPR/S/75 Trade Policy Review
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and exemptions, and income taxes exemptions.  These benefits have been granted since 14 March
1997;  the programme was scheduled to expire on 31 December 1999, although some benefits will
continue until 2010 at a reduced rate.200
196. In 1999, a new programme to promote regional development and support the automotive
industry was implemented.201  Industries established in the north, north-east and central-west
regions of the country, with the exception of the Federal District, to produce automotive vehicles(HS 8702-HS 8704) benefit from a reduction of the IPI.  Imports of parts to produce automotive
vehicles classified under HS headings 8701-8705 and 8711 are also exempt from the IPI.  The
measure will be in place until 2010.
(b) Free trade zones
197. There are four free trade zones in Brazil (Manaus, Macapa/Santana, Tabatinga, and Guajari),
and four others have been authorized.
202  However, the only zone currently in operation is the Manaus
Free Trade Zone (MFTZ), the others engage only in commerce operations.  Since 1996, there has
been no change in government policy towards MFTZ, neither have the incentives granted to the
companies established in the zone been modified.  The principal requirement for the concession of
those benefits continues to be the observance of the basic productive process (PPB) criteria, whichrequire firms to undertake locally agreed manufacturing steps for specific products.  Zone enterprises
must provide a detailed description of the various stages of assembly, preparation, and transformation
of inputs used for manufactured products.
198. Incentives conceded to the companies establis hed in the MFTZ are in the form of tax
exemption granted by the Federal Government.  Free-trade-zone status allows foreign goods to enter
the MFTZ without payment of customs duties or other federal, state, or local import taxes.  In
addition, the Industrial Product Tax is not applied and the ICMS (sales tax) is partially refunded.Import licences must be authorized both by SECEX and by the Superintendent of the MFTZ
(SUFRAMA), the Manaus free-zone authority.  These incentives will be in force until 2013.
199. The quota system for imports into Manaus, modified several times since 1991
203, was
eliminated in 1996 for industrial activities;  it wa s maintained for trading activities both in the MFTZ
and in other FTZs until 1998 when, the authorities noted, all quotas were eliminated.204  Nevertheless,
industrial enterprises must obtain prior authorization from the Administrative Council of the MFTZ to
operate in it.
200. Importers are allowed to supply foreign goods from their stock in the MFTZ to other parts of
the country, regardless of quantity.  These goods are subject to all import duties and taxes normally
assessed.  Products originating in the Free Trade Zone of Manaus are considered extra-zone, thus theyare subject to import duties.  However, once the negotiation of the MERCOSUR Customs Code is
concluded the status of the free trade zones might be redefined.
201. The major activities developed in the MFTZ took place in the trade, industrial, and
agricultural sectors.  Since 1996, production in the MFTZ has decreased, as has the proportion of
goods sold domestically.  Local value added has also been slipping and the number of jobs offered has
                                                     
200 WTO document G/SCM/N/16/BRA/Suppl.1, 23 January 1997, and Article 11, Law No. 9.440,
14 March 1997.
201 Law No. 9.826, 23 August 1999.
202 U.S. Department of Commerce (1999a).
203 Law No. 8.387, 30 December 1991.
204 WTO (1997a).Brazil WT/TPR/S/75
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decreased.205  In contrast, exports from the MFTZ increased from 0.8% in 1996 to 5.2% in 1999
(Table III.19).  Production is concentrated in items such as electric appliances, diskettes and audio
tapes, wrist and pocket watches, shaving sets, and eye glasses and frames.
Table III.19
Manaus Free Trade Zone production, 1996-99
(US$ million, per cent)
Markets Share (%)
Year Domestic Foreign Total Domestic Foreign
1996 13,153 105 13,258 99.2 0.8
1997 11,580 149 11,729 98.7 1.3
1998 9,701 227 9,928 97.7 2.3
1999 6,774 372 7,146 94.8 5.2
Source: SAP/DEMO/COISE.
(c) R&D and other programmes
202. The Industrial Technology Development Programme (PDTI), the Agriculture/Cattle Breeding
Technology Development Programme (PTDA), Financ ing of Studies and Projects - Technological
Development of Enterprises (FINEP) and the National Fund for Scientific and Technological
Development (FNDCT) were notified by Brazil in 1996 pursuant to Article XVI:1 of the GATT 1994(on subsidies) and Article 25 of the Agreement on Subsidies and Countervailing Measures.
206
203. The PDTI and PTDA were described as providing incentives for research and development,
including the deduction of up to 8% of income tax;  exemption from the IPI on equipment, machineryand devices destined for research and technological development;  accelerated depreciation and
amortization for purposes of calculating income tax;  a credit of 50% of the income tax,  and a 50%
reduction of the Financial Operations Tax charged on values paid, sent, or credited to beneficiaries
that reside abroad.  The beneficiaries of the incentives are industrial and agricultural/cattle breeding
enterprises, enterprises that develop integrated circuits, and enterprises that produce software.  Theenterprise may benefit from the incentive only as long as it is developing a PDTI or a PTDA.  The
duration of fiscal incentives is indeterminate.
204. In 1996, new regulations were approved for FINEP, a programme created in 1967 to facilitate
the development and improvement of products, processes and services, as well as the incorporation of
new technology, through concessionary financing.  Financing conditions involve a concessionary
interest rate (TJLP) plus annual spreads of 2.5% to 8%, no payments need to be made for up to three
years.
207  The amortization term is up to seven years.  The concessions granted are contingent on the
presentation of detailed projects, which are analysed by a multi-disciplinary team of the FINEP and/orconsultants.  The benefits of this programme are indeterminate.
205. FNDCT provides concessionary financing to universities, research institutions, and public or
private non-profit entities dedicated to science and technology.  Resources should be used for applied
research programmes and projects;  human resource training;  technical and scientific cooperation
between research groups associated with institu tions, and national and foreign companies, aimed at
developing or improving the domestic scientific and technological capacity.  It also finances the
installation and the furnishing of equipment of res earch centres and laboratories, which constitute the
basic national scientific and technological infrastructure.  Financing is conditioned by the presentation
of detailed projects, which are analysed by a multi-disciplinary team of FINEP and/or consultants.
The duration of the programme is indeterminate.
                                                     
205 The Economist , 19 February 2000.
206 WTO document G/SCM/N/16/BRA, 5 July 1996.
207 TLJ rates:  11.02% in 1996;  9.89% in 1997;  18.06% in 1998;  and 12.50% in 1999.WT/TPR/S/75 Trade Policy Review
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206. Fiscal incentives are granted to the Brazilian steel industry.208  The Government refunds 95%
of the IPI related to sales in the internal market to  firms that undertake projects of:  (i) investment to
increase production;  (ii) improvement of product quality;  (iii) improvement of the environment;
(iv) increase in productivity;  and (v) renovation of their premises.  The Ministry of Industry,
Commerce and Tourism is responsible for the administration of this incentive.  This incentive
programme ceased on 31 December 1996.
(iv) Intellectual property rights
(a) Introduction
207. Brazil is a member of the World Intellectual Property Organization (WIPO) and a signatory to
the Paris Convention (Stockholm Revision), Berne Convention, Madrid Agreement, Rome
Convention, Patent Cooperation Treaty, Strasbourg Agreement, Phonograms Convention, Nairobi
Treaty, Film Register Treaty, the Universal Copyright Convention, and UPOV 1978 (since
May 1999).209
208. Since 1996, Brazil has passed revised copyright, patent, and trade mark legislation.  Brazil's
new Industrial Property Law took effect in May 1997.  New laws have also been passed to protect
computer programs210;  and new plant varieties.211  A draft law for the protection of the layout designs
of integrated circuits, which was introduced to Congress in April 1996, remains under discussion.
209. Since 1996, the number of patents, trade marks a nd industrial designs registered annually has
increased substantial (Table III.20).
Table III.20
Patents, trade marks, and industrial designs registered, 1996-99
Registered per year 1996 1997 1998 1999
Patents 1,695 1,847 3,200 3,513
Trade marks 31,344 29,393 26,340 42,616
Industrial designs 906 1,310 2,728 4,678
Source : Government of Brazil.
(b) Industrial property
210. The National Institute of Industrial Property (INPI) is the government entity in charge of
granting industrial property rights – patents, trade marks (and service marks) and industrial design –
and registering (notation of) geographical indications.
211. Until 14 May 1997, industrial property in Brazil was regulated by the Brazilian Industrial
Property Code (Law No. 5.772 of 21 December 1971).  That Code was replaced by the Industrial
Property Law (Law No. 9.279 of 14 May 1996), which updated the regulations concerning thegranting of invention and utility model patents;  registration of industrial designs;  registration of trade
marks;  repression of false geographical indications;  and unfair competition.  The new Industrial
Property Law covers the granting of patents to pharmaceutical products and processes, chemical
                                                     
208 WTO G/SCM/N/3/BRA, 18 March 1996.
209 WTO document IP/C/W/155/Add.5, 19 October 1999.
210 Law No. 9.609, 19 February 1998.
211 WTO document IP/C/M/25, 22 December 1999.Brazil WT/TPR/S/75
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products, processed foods, and metal alloys, which were not patentable under Brazil's 1971 Law.  An
additional feature is the recognition given to famous and well-known trade marks and service marks.
An invention is patentable if it satisfies the requirements of novelty, inventive step, and industrial
application.  The Law covers applications for patents or for registration made abroad and filed in
Brazil by a party protected under a treaty or convention in force in Brazil.  The Law also protects
nationals of or persons domiciled in a country that assures Brazilians or persons domiciled in Brazilreciprocity of equal or equivalent rights.
212. The Industrial Property Law also applies to pending patent application made, except when the
application was filed before 31 December 1994 and applies to substances, materials or products
obtained by chemical means or processes, and alimentary or chemical-pharmaceutical substances,
materials, mixtures or products, and medications of any kind.
212  A patent application for those items
or processes may be filed by a party protected by a treaty or convention in force in Brazil, in which
case it is assured the date of the first patent application filed abroad.213  This Provisional Measure has
been reissued every 30 days since its first edition on 30 December 1999, however given the nature of
a Provisional Measure it could be subject to change.
213. The Brazilian Industrial Property Law excludes from patentability the whole or parts of life
forms other than transgenic micro-organisms that co mply with the three requirements of patentability
(novelty, inventive step, and industrial applicability) and that are not mere discoveries.214
214. An invention patent must remain in force for 20 years, and a utility model patent for 15 years
from the date of filing with the INPI.  Once an application has been presented, a preliminary formal
examination takes place, and a receipt of filing is issued.  The application is kept secret for 18 months,
and is then officially published.  The inventor has 36 months from filing to request a formal
examination of the application.  Failure to request this formal examination causes the application to be
considered dismissed.
215. Commercial use of a patent must be initiated within three years of the date of issue, under
penalty of compulsory licensing or lapse.  Lapse of a patent may also occur on expiration of the term;
on renunciation;  on forfeiture; on failure to pay annuities to INPI, and failure of a foreigner to appoint
an attorney duly qualified and domiciled in Brazil, and with powers to represent that person inadministrative and judicial proceedings, including receipt of summons.  Fees are used to support the
INPI.  Individuals, small business, and research institutions, national or foreign, are entitled to a
reduction in fees.  Compulsory licences may be granted for abuse of rights, abuse of economic power,
non-working in Brazil, failure to meet the needs of the market, in national emergencies, or to meet the
public interest.  Decree No. 3.201 of 6 October 1999 regulates the granting of compulsory licences incases of national emergency and public interest.  In addition, as a remedy for conduct in violation of
the Competition Law, as determined by CADE, the INPI can grant compulsory licences of patents.
(c) Trade marks
216. The new Industrial Property Law added provisi ons that improved the protection of famous
and "well-known" trade marks and service marks, re gardless of whether already filed or registered in
Brazil.
                                                     
212 Article 229 of Law No. 9.279 of 14 May 1996 amended by Provisory Measure No. 2.014-1,
30 December 1999.
213 Provisional Measure No. 2.014-1, 30 December 1999.
214 WTO document IP/C/M/25, 22 December 1999.WT/TPR/S/75 Trade Policy Review
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217. Any distinctive visually perceivable sign can be registered as a mark, e.g. product or service
mark, certification mark, collective mark.  The property of a mark is acquired by means of
registration, which ensures exclusive use by the titleholder throughout the Brazilian territory.  The
application for registration of a mark filed in a country that maintains an agreement with Brazil or in
an international organization is assured the right of priority.  The titleholder of a mark or the applicant
is assured the right to assign his registration or application for registration;  license its use;  andsafeguard its material integrity or reputation.  The registration of a mark remains in force for ten years
from the date of granting of the registration;  this period may be extended for equal and successive
periods.  The registration of the mark is extinguished on expiration of the term;  on renunciation,
which may be full or partial regarding the products or services indicated by the mark;  on forfeiture;
or if a person domiciled abroad does not have an attorney representing them in Brazil.
(d) Copyright
218. Copyright (i.e. owners' and neighbouring rights) is regulated by Law No. 9.610 of
19 February 1998, pursuant to which all creative works of inspiration, however expressed, are
protected as intellectual property.  The author of the work, or, in the absence of proof to the contrary,the person claiming to be the author or whose name is included in the registered work, is treated by
Brazilian law as owner of the copyright.  Both i ndividuals and corporations may own a copyright.  In
addition, any duly authorized person who adapts, translates, arranges or edits a work may claim
copyright to the work;  this also applies to works in the public domain.
219. The provisions of Law No. 9.610 are applicable to the nationals of and persons resident in
countries that assure Brazilians or persons resident in Brazil reciprocity in the protection of
copyright or equivalent rights.  Copyright works are protected regardless of mode of expression
(Table III.21).  The protection of a copyrighted work extends to its title, provided that it is original
and not liable to be confused with that of a work of the same nature disclosed earlier by another
author.
Table III.21
Protected copyright works
The texts of literary, artistic or scientific works.
Lectures, addresses, sermons and other works of the same kind.
Dramatic and dramatico-musical works.
Choreographic and mimed works whose stage performance is set down in writing or otherwise.
Musical compositions with or without words.
Audio-visual works, with or without accompanying sounds, including cinematographic works.
Photographic works and other works produced by a process analogous to photography.
Drawings, paintings, engravings, sculptures, lithographs, and works of kinetic art.
Illustrations, maps, and  other works of the same kind.
Drafts, mock-ups, and three-dimensional works relating to geogra phy, engineering, topography, architecture, park and garden pla nning,
stage scenery, and science.
Adaptations, translations, and other transformations of original works, presented as a new intellectual creation.
Computer programs.a
Collections or compilations, anthologies, encyclopaedias, dictionaries, databases, and other works that, by virtue of the selec tion,
coordination or arrangement of the subject matter, constitute intellectual creations.
a Computer programs are subject to specific provisions.
Source : Law No. 9.610 ( Lei de Dereitos Autorais ), 19 February 1998.
220. Registration of a copyright in Brazil is optional, and not essential for its protection.
Nevertheless, in order to secure the copyright the author may register his/her work with the following
bodies, depending on its nature:  the Brazilian National  Library;  the School of Music or the School of
Fine Arts of the Federal University of Rio de Janeiro;  or the Federal Council of Engineering,
Architecture and Agronomy.215
                                                     
215 Article 17, §1 and 2 of Law No. 5.988, 14 December 1973.Brazil WT/TPR/S/75
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221. The author’s economic rights are protected for the life of the author, plus 70 years from
1 January of the year subsequent to his death, subject to observance of the order of succession under
civil law.  Where a literary, artistic or scientific work of joint authorship is indivisible, the term of
protection is calculated from the death of the last surviving joint author.  The term of protection of
rights in anonymous or pseudonymous works is also 70 years from 1 January of the year following the
first publication.  The term of protection of photographic or audio-visual works is 70 years from1 January of the year the work became known (disclosure).  Authors' rights may be wholly or partlytransferred to third parties or by his successors.
222. The provisions on authors' rights apply to the rights of performers, producers of phonograms
and broadcasting organizations.  The term of protection of neighbouring rights is 70 years from
1 January of the year following fixation for phonograms, transmission for the broadcasts of
broadcasting organization, and public performance in other cases.
(e) Software
223. Law No. 9.609 of 19 February 1998 ( Lei de Programa de Computador ), and Decree
No. 2.556 of 20 April 1998 ( Decreto de Regulamentação do Registro de Programa de Computador )
regulate software protection in Brazil.  These regulations provide for:  the protection of software ascopyright;  rules for marketing software;  and penalties of a criminal nature for cases of infringement.
224. Law No. 9.609 and Decree No. 2.556 maintained the system of copyright protection for
foreign and domestic software, but discontinued the requirement of commercial registration with theBrazilian authorities prior to the marketing of software in Brazil.  It also ended the market reserve on
software, allowing any company – regardless of th e origin of its capital or of the controlling
shareholder – to market software in Brazil, and extinguished the similarity test for foreign software.
225. Software is protected for 50 years, starting from 1 January of year subsequent to its
publication or, if this is unavailable, its creation.  Exclusive rental rights are recognized.  Software
owners that reside outside Brazil are ensured protection, provided that the country of origin of thecomputer program grants both Brazilian and aliens resident in Brazil equivalent protection.
226. As with other copyrights, the protection of software does not depend on registration, and the
author need not register it.  Registration can be made at the National Institute of Industrial Property(INPI).  The voluntary registration of computer programs is regulated by Decree No. 2.556.  To be
used in Brazil, computer programs can be licensed.  In the absence of a formal licence agreement, the
tax document obtained when acquiring the softwa re could be used as proof of its legal use.
227. According to Law No. 9.609, the following situ ations do not violate software copyright:
reproduction of a sole copy that has been legally acquired to be used as a backup;  partial quotation
for educational purposes, provided the author and software quoted are mentioned;  similarity of two
types of software, provided this similarity stems from functional features in their application, from
compliance with legal, regulatory precepts or technical standards, or a limitation of alternative formsfor their expression;  and integration of software and its basic features into an application or operating
system that is technically indispensable to the user's  needs, provided it is used exclusively by whoever
undertook this integration.
(f) Plant variety protection
228. Law No. 9.456 of 25 April 1997 established protection of intellectual property rights for
cultivated plant varieties.  The term of protection is 15 years, except for grapevines, fruit trees, forest
trees, and ornamental trees for which it is 18 years.  The variety must be registered at the Brazilian
Cultivated Plant Variety Protection Service (SNPC) , under the Ministry of Agriculture and Supply.
216
                                                     
216 Decree No. 2.366, 5 November 1997.WT/TPR/S/75 Trade Policy Review
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Natural persons and legal entities that file for protection of plant varieties in countries with which
Brazil has an agreement, or in an international organization to which Brazil is a party are assured
priority rights for up to 12 months.  The plant variety protected may be the object of a compulsory
licence.
229. Brazil adheres to the Convention on the Protection of New Varieties of Plants (UPOV).217
230. Layout designs of integrated circuits are not yet protected in Brazil.  A draft law was still
under discussion in Congress in early 2000.
(g) Enforcement
231. The Industrial Property Law specifically establishes civil and criminal offences and
procedures for violation of inventions or utility model patents, trade marks, industrial designs,
geographical indications, and unfair competition.  The penalty of imprisonment (three months to ayear) and/or a fine may be increased up to ten-fold  according to the infringement and the infringer.
The Copyright Law establishes which acts are to be considered civil offences, while crimes are
described in the Penal Code.  Penalties vary from six months to four years of imprisonment and/or afine.
232. Infringement of software copyright is a civil and criminal offence, which subjects the
infringer to detention from six months to four years, plus a fine depending upon the infringement.
The violation of copyright consists of full or partial reproduction, by any means, of a software
program, for commercial purposes, without express authorization from the author or its representative.The sale, introduction in the country, acquisition, or deposit, for commercial purposes of any original
or copy of a software program produced in violation of copyrights is prohibited.  In case of violation
of software copyrights, the criminal action and preliminary service of search and seizure must be
preceded by an inspection, and the judge may order the seizure of the copies produced or
commercialized in violation of copyrights, their versions and derivations in possession of the infractoror of whomever places on sale, holds in deposit, reproduces or commercializes them.
233. Brazil has made important efforts in recent years to improve the enforcement of intellectual
property rights.  Although, like in most countries, no reliable, independent estimates are available,considerable gains appear to have been made:  according to industry sources, enforcement of
Brazilian laws against video and software piracy  has improved since 1996, and the Government has
initiated action to better fight the importation of pirated sound recordings and video-cassettes.
218  The
implementation of SISCOMEX, which interconnects the Brazilian customs' offices, and some
integrated and coordinated actions by the Brazilian authorities is helping to improve enforcement ofintellectual property rights.  For instance, counterf eited goods or goods that incorporate IPRs without
the titleholder's authorization may be subject to search and seizure.
234. In the last few years, foreign and national firms have been successful in using the Brazilian
legal system to protect their copyrights, and the Government has initiated action to reduce the
importation of pirated sound recordings and video-cassettes.  Nevertheless, there are claims that the
value of fines established several years ago has eroded to the point where they are no longer adeterrent to piracy.
219  Congress is examining a bill of initiative of the Executive Branch to review the
criminal sanctions on copyright infringements and provide better ruling on this topic.  This bill would
complement Law No. 9.610 on copyright.  Nevertheless, ensuring the protection of property rights
remains a challenge for Brazil.
                                                     
217 WTO document IP/C/M/25, 22 December 1999.
218 U.S. Department of Commerce (1999d).
219 U.S. Department of Commerce (1999e).