G/ADP/Q1/BRA/45  
G/SCM/Q1/BRA/45  
G/SG/Q1/BRA/14  
 
6 May 2019 
(19-3105) Page: 1/3 
Comm ittee on Anti -Dumping Practices  
Committee on  Subsidies and Countervailing Measures 
Committee on Safeguards  Original: English  
 
  
NOTIFICATION OF LAWS AND REGULATIONS UNDER  
ARTICLES 18.5, 32.6  AND 12.6 OF THE AGREEMENTS  
REPLIES TO QUESTIONS POSED BY THE UNITED STATES1 REGARDING  
THE NOTIFICATION OF BRAZ IL2 
The following c ommunication, dated 28 April 2019, is being circulated at the requ est of the 
delegation of Brazil . 
 
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Question 1  
 
In paragraph 1 of Article 1, Brazil states that, for purposes of trade remedy proceedings, DECOM 
considers a fragmented industry to be one that involves "a large number of domestic producers ". 
Please explain how many producers DECOM considers to be a "large number " of producers. Is there 
any specific threshold that must be met?  
 
Reply  
 
There is no specific threshold that has to be met in order for a national production of a particular 
good to qualify as a fragmented industry. The decision on whether a nati onal production of a certain 
good involves "a large number of domestic producers " shall be made on a case -by-case basis, taking 
into account the number of domestic producers, the volume of national production and of sales in 
the Brazilian market and the di stribution of the national producers by size (based on sales revenue 
or number of employees, or based on a commonly adopted criterion in the sector), among other 
factors.  
 
In this sense, a large number of domestic producers is a condition that has to be me t for the national 
production of a particular product to be qualified as a fragmented industry, but it is not sufficient on 
its own. The factors established in paragraph 2 (the degree of pulverization of the national production 
of the product concerned and  the distribution by size of national producers) shall be taken into 
account in the determination of fragmented industry, as well as the information required in Article  16 
of Ordinance 41 of 31 July 2018, among other factors that may be brought to the atte ntion of the 
investigating authority in each case. However, paragraph 1 of Article 16 established that the 
information listed do not constitute an exhaustive list, and none of those factors on its own or 
together can necessarily give decisive guidance. Bes ides, the applicant shall explain, based on the 
information indicated in Article 16, how the fragmentary nature of the industry would make it difficult 
to file a petition for a trade remedy investigation within the time limits otherwise applicable.  
 
Question 2  
 
In paragraph 2 of Article 1, Brazil states that, in determining whether the domestic industry is 
fragmented, DECOM will consider, among other factors, the degree of pulverization of the national 
                                                
1 G/ADP/Q1/BRA/41 -G/SCM/Q1/BRA/41 -G/SG/Q1/BRA/10 (da ted 3 April 2019).  
2 G/ADP/N/1/BRA/3/Suppl.11 -G/SCM/N/1/BRA/2/Suppl.14 -G/SG/N/1/BRA/3/Suppl.5 (dated 
31 January  2019).  G/ADP/Q1/BRA/45 • G/SCM/Q1/BRA/45 • G/SG/Q1/BRA/14  
 
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  production as well as the distribution by size of  national producers . Please explain the analysis that 
would be undertaken and factors considered by DECOM when deciding whether the national 
production of a particular product qualifies as a fragmented industry .  
 
Reply  
 
Please refer to the previous answer , which explains that the decision on whether a national 
production of a certain good qualifies as a fragmented industry shall be made on a case -by-case 
basis. The list foreseen in Article 16 of Ordinance No . 41, of 2018, constitutes an indication of the 
factors to be considered by DECOM when deciding whether the national production of a particular 
good qualifies as a fragmented industry. However, when an applicant in Brazil is a fragmented 
industry, the infor mation submitted in the application is usually secondary data and the secondary 
data available depends on the nature of the sector, on whether there is an association or class entity 
and the number of associated companies, among other elements. Therefore, the analysis to be 
undertaken and factors to be considered by DECOM shall vary based on the information available in 
each specific case and on the nature of the sector requesting the trade remedy investigation.  
 
In addition, the applicant shall explain, ba sed on the information indicated in Article 16, how the 
fragmentary nature of the industry would make it difficult to file a petition for a trade remedy 
investigation within the time limits otherwise applicable. First, it is important to confirm that the 
number of producers is high enough in order to allow a finding of fragmented industry. Once that is 
confirmed, it is necessary to evaluate the distribution of the producers by size, since there might be 
several small firms representing a small percentage of  the domestic production of the like product, 
while a few larger companies might represent a major proportion of such production. That is the 
reason why, in each case, the level of dispersion of the production must be assessed. It may be the 
case that the national production is scattered across the country, which may make the use of primary 
information submitted by the domestic producers not feasible.  
 
Question 3  
 
In Article 2, Brazil states that DECOM will determine whether the domestic industry is fragmen ted 
prior to the date the application (i.e., petition) for the trade remedy proceeding is filed with DECOM . 
Article 12 states that "Upon initiation of the trade remedy investigation, interested parties may 
submit their comments on DECOM 's decision to quali fy the national production of the product 
concerned as fragmented industry ". Please provide responses to the following:  
 
(a) Is there any opportunity for interested parties to comment on the petitioner 's request to find 
an industry to be fragmented, as wel l as DECOM 's analysis and decision, prior to the initiation 
of the trade remedy proceeding ?  
(b) Once a trade remedy investigation has been initiated, will DECOM take into consideration 
comments submitted by interested parties that oppose its earlier findi ng that the domestic 
industry is fragmented ? If so, how will these arguments and comments be addressed ?  
 
Reply  
 
(a) No. Interested parties may only comment on the petitioner's request to be considered as a 
fragmented industry after the initiation of the t rade remedy investigation.  
 
(b) As provided for in Article 12 of Ordinance No. 41, of 2018, upon initiation of the trade remedy 
investigation, interested parties will have 30 days to submit their views on DECOM's decision 
to qualify the petitioner as a fra gmented industry. Following this period, the petitioner will 
have 15 days to comment on the information submitted by the other interested parties. Up to 
60 days after this later period, DECOM will consider all the information presented by the parties 
and issue its final decision on the fragmented status of the like product's national production. 
All the information submitted may be subject to on -the-spot investigation. In case the 
Department decides to revert its prior decision, the trade remedy investigati on will be 
immediately terminated.  
 
Question 4  
 
If, as a result of the procedures laid out in Ordinance 41 of 31  July 2018, DECOM finds that the 
national production of a particular product qualifies as a fragmented industry, and an application G/ADP/Q1/BRA/45 • G/SCM/Q1/BRA/45 •  G/SG/Q1/BRA/14  
 
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  seeking a tr ade remedy investigation for such product is subsequently filed, how will DECOM go 
about determining industry support for the application ? Will DECOM poll the industry ? If so, how will 
DECOM go about doing so ? What procedures will be followed ? Please expla in any additional 
consequences of an administrative finding of a fragmented industry on the investigation.  
 
Reply  
 
The determination of support for the application will continue to be carried out as it was prior to this 
legislation. In the case of anti-dumping investigations, paragraph 3 of Article 37 of the Brazilian AD 
Regulation (Decree No. 8,058, of 2013) determine that, in the case of fragmented industries, the 
level of support for the application may be determined through a statistically valid  sample.  
 
Therefore, it is important to make clear that the Brazilian legislation concerning fragmented 
industries only provides for more flexible deadlines for the submission of applications and for greater 
flexibility concerning the information required in such applications, since petitioners may resort to 
secondary sources of information, in a way that all other proceedings remain the same.  
 
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