G/ADP/Q1/BRA/48  
G/SCM/Q1/BRA/48  
 
1 December 2022  
(22-8937) Page: 1/2 
Committee on Anti -Dumping  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 
NOTIFICATION OF LAWS AND REGULATIONS UNDER  
ARTICLE 32.6 OF THE AGREEMENT  
REPLIES TO QUESTIONS POSED BY THE UNITED STATES1 
REGARDING THE NOTIFICATION OF BRAZIL2 
The following communication, dated and received on 30 November 2022, is being circulated at the 
request of the delegation of Brazil.  
 
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Question 1  
Can Brazil please explain if Chapter II, Article 7, paragraphs 2 and 3 of the Decree 
contemp late a situation where the "country of origin" and the "country of export" are 
different and can be simultaneously investigated?  
Reply : 
As per Article 7, paragraph 2, both the country of origin and the country of export may be 
simultaneously investigated if both grant subsidies to the product under consideration.  
Question 2  
Pursuant to Chapter III, Article 19 of the Decree, when examining whether a benefit has 
been provided in the context of upstream subsidization, does Brazil intend to analyze 
whether a "competitive" benefit has been provided?  
Reply : 
When considering upstream subsidies, a benefit is deemed to exist when, due to t he upstream 
subsidy, the producer is better off in producing or manufacturing the product under consideration. 
For example, a common upstream subsidy is the provision of inputs for less than adequate 
remuneration, allowing the producer to unfairly lower it s costs of the final product and sell it for 
artificially low prices, and/or increase its profit margins.  
Question 3  
In addition, does Brazil intend to provide an explanation of how a benefit and significant 
effect will be determined as described in Articl e 19 of the Decree?  
 
1 G/ADP/Q1/BRA/47 -G/SCM/Q1/BRA /47 
2 G/SCM/N/1/BRA/2/Suppl.22  G/ADP/Q1/BRA/48 • G/SCM/Q1/BRA/48  
 
- 2 - 
 
  Reply : 
The Sole Paragraph of Article 19 of the Decree establishes that only upstream subsidies that have a 
significant effect on the manufacturing or production cost of the investigated subsidized product will 
be investigated. Brazil ha s specified the exact meaning of "significant effect" with regard  to upstream 
subsidies on Article 108, Paragraph 3, of Ordinance n. 172, dated 14 February, 2022 (that is 
undergoing a process of translation to English and will be notified in due time):  
Paragraph 3. An upstream subsidy will be considered to have significant effects when the amount 
ad valorem of the input subsidy multiplied by the percentage of the cost of this input in relation to 
the manufacturing or production cost of the investigated prod uct corresponds to a percentage of at 
least 1%, not including general, administrative, marketing and other operating expenses.  
Question 4  
Pursuant to Chapter VI, Section III of the Decree, please explain what circumstances or 
conditions would allow Brazil to investigate programs other than those indicated in the 
subsidy application.  
Reply : 
A program other than those indicated in the subsidy application may be identified either by the 
petitioner, by the investigated authority or by an investigated party volu ntarily coming forward, as 
the questionnaire sent to the government and the investigated producers also has a section on 
"other programs ". 
If a new program is found during the investigation, Brazil will, if necessary, send a supplemental 
questionnaire, pub lish an amendment to the notice of initiation in the Official Gazette, notify the 
interested parties for comments and invite the investigated country for a new round of consultations.  
Article 113 of Ordinance No. 172, dated 14 February, 2022 (that is unde rgoing a process of 
translation to English and will be notified in due time) specifies our procedure:  
Article 113. Pursuant to item III of Article 16, the Undersecretariat for Trade Remedies and Public 
Interest may investigate subsidy programs in addition to those indicated in the petition, including 
those identified in the course of the investigation, provided that it has sufficient evidence of the 
existence of the subsidy program.  
Paragraph 1. The producer/exporter and foreign government questionnaires wi ll request information 
on any and all subsidy programs that have benefited the investigated companies during the 
investigation period.  
Paragraph 2. The Undersecretariat for Trade Remedies and Public Interest may request information 
and clarifications about  new subsidy programs investigated not informed in the answers to the 
questionnaires, but whose evidence demonstrates that they benefited the investigated company 
during the investigation period.  
Paragraph 3. If the subsidy programs identified in the cours e of the investigation are not covered by 
the circular that initiated the investigation, the Secretariat of Foreign Trade will publish an 
amendment to said circular in the Official Gazette of the Union, and an opportunity will be given for 
manifestations b y interested parties and for consultations with the government of the investigated 
country, if requested by that government, with the aim of clarifying any questions about the 
information and evidence on each subsidy program identified in the course of the  investigation.  
Paragraph 4. If the subsidy programs that were not included in the answer to the questionnaire are 
identified during an on -the-spot investigation, the Subsecretariat of Commercial Defense and Public 
Interest will notify the interested parties to guarantee the right of full defense and to preserve the 
adversary system, and may use the best information available, pursuant to Paragraph 3 of Article  46 
with Article 174 to 179 of Decree N. 10839, of 2021.  
 
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