G/SCM/Q2/BRA/54  
21 November  2019 
(19-7963) Page: 1/3 
Committee on Subsidies and Countervailing Measures  Original:  English  
 
  
SUBSIDIES  
REPLIES  TO QUESTIONS POSED BY THE UNITED STATES1 REGARDING  
THE NEW AND FULL NOTIFICATION OF BRAZIL2 
 
The following communication, dated 19 November  2019, is being circulated at the request of the 
delegation of Brazil . 
 
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Productive Development Policy  
Question 1  
Do fishing vessels qualify for support under this program ? If so, can the support be 
quantified?  
Reply  
According to Article 3 of Law 11.774, of 2008, support was restricted to vessels covered by the 
Brazilian Special Register, which, according to Article 1, sole paragraph, line IV, of the Law 9.432, 
of 1997, does not include fishing vessels. The second question, therefo re, does not apply.  
Diesel Oil Price Equalization Scheme  
Question 2  
Why is the price of diesel in Brazil higher than the international price?  
Reply  
Diesel prices in Brazil take as a reference those practiced in international markets, adjusted per 
import parity price. The Equalization Scheme bridges occasional variations that might occur between 
domestic and international prices.  
Question 3  
What does it mean to "take into account vessel control "? 
Reply  
The Diesel Oil Price Equalization Scheme is und er strict control through several registry and 
management systems. To apply and benefit from the scheme, both the beneficiary and the fishing 
vessels must be previously registered in the Federal Government 's "Sistema Informatizado do 
Registro Geral da Ativ idade Pesqueira" – SisRGP, in the "Sistema de Subvenção ao Abastecimento 
                                                
1 G/SCM/Q2/BRA/53 (dated 26 August 2019).  
2 G/SCM/N/343/BRA.  G/SCM/Q2/BRA/54  
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  do Diesel Pesqueiro – SSADP", and in the "Programa Nacional de Rastreamento de Embarcações 
Pesqueiras por Satélite – PREPS". Furthermore, the federal government must formalize agreeme nts 
with the state level, establishing operational procedures that ensure that the benefit be granted 
exclusively to the registered fishing vessels.  
National Program for Financing the Enlargement and Modernization of the National 
Fishing Fleet  
Question 4  
Please describe in greater detail the nature of the sustainability criteria and improvements 
in the working conditions that must be met to qualify under this program.  
Reply  
Some of the program 's goals are the reduction of the catch pressure on overfished stocks and the 
promotion of sustainability of the fishing fleet. As per Law 10.849/04, Article 6, bonuses are granted 
for payment compliance, according to environmental and social factors, such as the situation of the 
fish stocks and the improve ment of workers ' conditions.  
Question 5  
On what bases do the bonuses vary from five, to twenty, to thirty  per cent ? 
Reply  
Bonuses for performance of loan repayment depend on the purpose of the financing, i.e., building, 
purchase or modernization of a fishi ng vessel, as well as on the fishing activity (underexploited or 
unexplored species; EEZ and international waters) are regulated in accordance with 
Decree  5.474/05:  
- Financing for the construction and simultaneous equipping of vessels:  
a) bonus of thirty %, in the case of construction of a replacement vessel, when there 
is substitution from fishing of an overfished stock for fishing of stocks under lower 
catch pressure;  
b) bonus of twenty %, in financing operations for the construction of vessels 
intended for the capture of underexploited or unexploited stocks in the Exclusive 
Economic Zone (EEZ) and in international waters.  
- Financing for the acquisition of vessels, built no more than five years ago:  
a) bonus of five %, when vessels intended for capture o f underexploited or 
unexploited stocks in the EEZ and in international waters.  
- Financing for vessel modernization  
a) bonus of thirty %, in the case of modernization of a vessel for substitution of 
fishing of an overfished stock for fishing of stocks unde r lower catch pressure;  
b) bonus of five %, in the case of modernization of a vessel for equipage involving 
substitution of equipment and fishing gear with high environmental impact and 
of high risk for fishermen´s health.  G/SCM/Q2/BRA/54  
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  Question 6  
Why has no funding been provided under this program ? Is it anticipated that funding will 
be provided in the future?  
Reply  
There has not been much interest in the program. This might be due to the program´s stringent 
qualification requirements.  
Other Programs  
Question  7 
According to publicly available information, sub -central governments may have provided 
support under the programs listed below . Please explain why these programs were not 
notified.  
- State of Sao Paulo – State Fund for Economic Development Incentives (F IDEC), 
which may provide special financing for up to 12 years to industrial and 
agro-industrial companies at five  per cent  interest and a ten -year grace period . 
Reply  
This program does not constitute a subsidy program  
- State of Rio de Janeiro – Rio Invest, which may offer special tax incentives or lines 
of credit to individually identified companies . 
Reply  
This program does not constitute a subsidy program.  
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