G/SCM/N/253/BRA  
 
5 May 2014  
(14-2712)  Page: 1/14  
Committee on Subsidies and Countervailing Measures  Original: English  
 
 SUBSIDIES 
 
NEW AND FULL NOTIFICATION PURSUANT TO ARTICLE XVI:1 OF 
THE GATT 1994 AND ARTICLE 25 OF THE AGREEMENT ON 
SUBSIDIES AND COUNTERVAILING MEASURES 
BRAZIL  
The following communication, dated 28 April 2014, is being circulated at the request of the 
Delegation of Brazil.  
_______________ 
 
 The following notification constitutes Brazil's subsidies notification for the fiscal years of 2011 and 
2012. 
 This notification does not prejudge the nature or legal status of the programmes herein under 
GATT 1994 and Articles 1 and 2 of the Agreemen t on Subsidies and Countervailing Measures 
(ASCM). Data may reflect approximations, estimates or preliminary information. Technical or legal inaccuracies may have been inadvertently introduced in the text in the attempt to make the description of the programmes sufficiently illustrative, but also straightforward and concise. For 
information purposes, Brazil has included certain programmes which arguably are not specific 
within the meaning of the Agreement. 
 G/SCM/N/253/BRA 
 
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TABLE OF CONTENTS 
 
1   INDUSTRIAL INCENTIVES ........................................................................................... 3  
1.1   Support Program for the Development of the Pharmaceutical Productive Chain 
(PROFARMA – Innovation) .................................................................................................. 3  
1.2   Capacity Building and Competitiveness Enhancement in Inform ation Technology ................ 4  
1.3   Industrial Technology and Agricultural/Cattle Breeding Technology Development 
Programme (PDTI & PDTA) ................................................................................................. 5  
1.4   Productive Deve lopment Polic y (PDP) ........................................................................... 6  
2   REGIONAL INCENTIVES............................................................................................... 7  
2.1   Amazon Development Authority and No rtheast Region Develo pment Authority ................... 7  
2.2   Investment Funds for the Amazon, the Northeast Regions and the State of Espírito 
Santo (Finam/Fin or/Funres ) ............................................................................................... 8  
2.3   Constitutional Funds for Financing the Northeast, the North and the Midwest 
Regions (FNE/ FNO/FCO ) .................................................................................................... 9  
2.4   Development Funds for the Amazon and the Northeast Re gions (FDA /FDNE) ..................... 10 
2.5   Regional Development and Promotio n of R&D and Technological Innovation 
Programme .....................................................................................................................  11 
3   FISHERIES INCENTIVES ............................................................................................ 12  
3.1   Diesel Oil Price Equalization Scheme ............................................................................ 12 
3.2   Programme for Vessel Fleet  Enlargement and Modernization ........................................... 13 
 
 G/SCM/N/253/BRA 
 
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1  INDUSTRIAL INCENTIVES 
1.1  Support Program for the Development of the Pharmaceutical Productive Chain 
(PROFARMA – Innovation) 
1. Title of the programme 
 
Support Programme for the Development of the Pharmaceutical Productive Chain (PROFARMA – 
Innovation).  
 2. Period covered by the notification 
 
From January 2011 to December 2012. 
 3. Policy objective and/or purpose 
 PROFARMA – Innovation aims at supporting projects that contribute to the consolidation of an innovative environment in Brazil's health industry. PROFARMA-Innovation supports R&D efforts 
made in Brazil by the pharmaceutical and medical devices companies. 
 4. Legislation and authority 
 
The Brazilian Development Bank (BNDES) is respon sible for the administration of the programme.  
During the period covered by this notification, the programme was operated in accordance with 
BNDES' Resolution 1834/2009. 
 
5. Form of subsidy 
 
Long-term loans and/or equity investment (through subscription of securities). Loans were granted 
at a fixed interest rate of 4.5% per year with maturity up to 15 years. Minimum support was R$1 million.   
6. To whom and how the subsidy is provided 
 
Any enterprise incorporated under Brazilian Law. 
 
7. Total amount 
 
Fiscal Year 2011: R$120,159,218  
Fiscal Year 2012: R$ 75,016,000   8. Duration 
 According to Resolution Number 2487/2013, the key financial conditions of the BNDES's support for Health Industry Innovation, as mentioned on item 5 above, are no longer valid.  
 
9. Trade effects 
 
N.A. G/SCM/N/253/BRA 
 
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  1.2  Capacity Building and Competitivene ss Enhancement in Information Technology 
1. Title of the programme 
 
Capacity building and competitiveness enhancement in Information Technology and related fields.  
 
2. Period covered by the notification 
 
From January 2011 to December 2012. 
 3. Policy objective and/or purpose 
 
To encourage manufacturers of information technology goods to invest in research and 
development activities, create new products and improve the country's competitiveness. 
 
4. Legislation and authority 
 
Law 8248/91, as amended by Law 10.1076/01 and, also, by Law 11077/04. 
 
Within their respective area of responsibility, the Ministry of Finance, the Ministry of Development, 
Industry and Foreign Trade and the Ministry of Science and Technology manage the provision of 
benefits such as partial tax exemption and the follow up of the counterparts offered, such as 
research and execution of development programmes.  
 5. Form of subsidy 
 Exemption or reduction of the Indirect Tax on Industrialized Products (IPI) for information technology goods. 
 
Reduction of IPI for raw materials, intermediate  goods and material from used packages. To 
qualify for this programme, companies must invest at least 5% of their turnover from product sales (after deduction of other indirect taxes) and the value of the acquisition of the products 
benefited by the programme, in research and development activities. 
 According to a framework defined in the legislation, the incentives provided by the programme 
began to be phased out in March 2005 with a view to termination in 2019. 
 6. To whom and how the subsidy is provided 
 Industrial enterprises, through tax credits provid ed by the Federal Government at the amount of 
due deductive taxes.  
Research Institutes, Centers and Laboratories, through financial support from industrial enterprises 
which choose to outsource the execution of research projects.  
7. Total amount 
 
Fiscal Year 2011: R$ 3,771.52 million. 
Fiscal Year 2012: R$ 4,482.20 million (estimated). 
 8. Duration 
 
The programme will be phased out by 2019.  
 9. Trade effects 
 N.A. G/SCM/N/253/BRA 
 
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1.3  Industrial Technology and Agricultur al/Cattle Breeding Technology Development 
Programme (PDTI & PDTA) 
1. Title of programme 
 
Industrial Technology and Agricultural/Cattle Breeding Technology Development Programme (PDTI 
& PDTA). The objective is to provide incentive for research and development in the above 
mentioned areas. 
 2. Period covered by the notification 
 
From January 2011 to December 2012. 
 3. Policy objective and/or purpose 
 Foster technological improvement for industrial  and agricultural/cattle breeding enterprises, 
through research and development initiatives, in order to create new projects and processes or 
improve existing projects, as well as promote indu strial and agricultural training. The programme 
seeks to promote partnerships between research centers and universities, institutes and enterprises managed by the enterprises through a permanent infrastructure of technological management. 
 
4. Legislation and authority 
 
The Industrial Technology and Agricultural/Ca ttle Breeding Technology Development Programme 
(PDTI & PDTA) was established by Law 8661 of 2 June 1993, regulated by Decree 949 of 5 October 1993. The Ministry of Science and Technology is responsible for the administration of 
the programme. 
 Law 9532 (10 December 1997) reduced the benefits granted to enterprise's research and development programmes. Law 10332 (19 December 2001) and Decree 4195 (11 April 2002) set 
forth provisions to enterprises which had projects approved under the PDTI/PDTA programmes. 
This law was revoked in January 2006, thus te rminating the programme. Firms with ongoing 
projects were authorized to keep benefiting from PDTI/PDTA until their completion. Therefore 
there is no project in execution in 2011 and in 2012. 
 5. Form of subsidy 
 Deductions of income tax due on the sum of the expenses in technological research and development activities and of Tax on Industrializ ed Products (IPI) due on equipment, machinery 
and devices directly allocated to research and technological development and also on instruments, 
parts and tools associated with those goods. 
 6. To whom and how the subsidy is provided 
 The beneficiaries are industrial and agricultural/c attle breeding enterprises. The amount of the 
subsidy is proportional to the value of the expenses on research and development. For instance, 
the amount of the IPI tax break depends on the value of machinery and equipment acquired for 
research and development purposes.  7. Total amount 
 Fiscal Year 2011: R$ -0-. Fiscal Year 2012: R$ -0-. 
 
8. Duration 
 
The programme was established in 1993 and terminated in January 2006. Only enterprises that 
had PDTI/PDTA projects approved before January 2006 could benefit from the programme. The maximum time period for executing a project is five years. Therefore, there was no project in execution neither in 2011 nor in 2012. G/SCM/N/253/BRA 
 
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9. Trade effects 
 N.A. 
 
 1.4  Productive Development Policy (PDP) 
1. Title of Programme 
 
Productive Development Policy (PDP).  
2. Period covered by the notification 
 
From January 2011 to December 2012.  
 
3. Policy objective and/or purpose 
 
The Productive Development Policy was created to increase production capacity, aiming to meet 
the growing of goods demand.  4. Legislation and authority 
 The Productive Development Policy was established by Law 11774/2008.  
The Ministry of Finance is responsible for the inspection of the tax incentives of the programme 
and the Ministry of Defense is responsible for the Brazilian Especial Register (REB).  
5. Form of subsidy 
 
a. Reduction of the indirect taxes PIS and COFINS for imports and acquisitions in the 
domestic market of goods and equipment, including parts and components, used in 
construction, conservation, modernization, conversion or repair of vessels registered in 
the Brazilian Especial Register (REB). 
b. Income tax postponement, as a result of accelerated depreciation of capital goods used 
in the manufacturing of vehicles and their parts. 
c. Income tax postponement, as a result of accelerated depreciation of equipment, 
machinery and devices used in the manufacturing of capital goods. 
6. To whom and how the subsidy is provided 
 
The reduction of indirect taxes PIS and COFINS mentioned in 5(a) is granted to shipyards that execute the activities of building, conservation, modernization, conversion or repair of vessels 
registered in the Brazilian Especial Register (REB). 
 The postponement of income tax mentioned in 5(b)  and (c) is granted to vehicle and vehicle parts 
industries, as well as capital goods industries. 
 7. Total amount 
 Fiscal Year 2011: R$ 115 million.  Fiscal Year 2012: R$ 123 million (estimated).  
8. Duration 
 
The programme has no pre-established time limit for its termination.  
 
9. Trade effects 
 
N.A.G/SCM/N/253/BRA 
 
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2  REGIONAL INCENTIVES 
2.1  Amazon Development Authority and Northeast Region Development Authority 
"Superintendência para o Desenvolvimento da Amazônia " (SUDAM), the Amazon Region 
Development Authority, was established by Law 5174, dated 27 October 1966. " Superintendência 
para o Desenvolvimento do Nordeste " (SUDENE), the Northeast Region Development Authority, 
was established by Law 3692, dated 15 December 1959. Provisional Measures 2156-5 and 2157-5, 
of August 2001, extinguished both authorities and the programmes they administered. The same 
Provisional Measures replaced those authorities by "Agência do Desenvolvimento da Amazônia" (ADA) and "Agência do Desenvolvimento do Nordeste" (ADENE). On 3 January 2007, ADA and ADENE were extinguished by Supplementary Laws 124/2007 and 125/2007, respectively, being 
replaced by SUDAM and SUDENE. The changes introduced by Supplementary Laws 124/2007 
and 125/2007 relate mainly to the legal structure and legal nature of those authorities.  
1. Title of programme
1 
 
SUDAM and SUDENE programmes provide assistance  to the economically disadvantaged Amazon 
and Northeast regions by means of income tax reductions. 
 2. Period covered by the notification 
 
From January 2011 to December 2012. 
 3. Policy objective and/or purpose 
 To reduce economic and social imbalances between the Brazilian regions by means of 
compensatory mechanisms for the development of the North and Northeast Regions. 
 
The area covered by SUDAM is denominated "Legal Amazonia", or the Amazon Region, 
encompassing the states of Acre, Amapá, Amaz onas, Mato Grosso, Pará, Rondônia, Roraima, 
Tocantins, and part of the state of Maranhão. The Amazon Region is an area of continental 
dimensions covering 5,046,143 square kilometers an d corresponding to 59% of Brazil's territory 
and approximately 70% of the so-called Pan-Amazon or Continental Amazon, which has a population of approximately 22 million inhabitants heavily concentrated in urban areas and 
scattered widely across a vast rural area. The jurisdiction of SUDENE encompasses the states of 
Piauí, Ceará, Rio Grande do Norte, Paraíba, Pe rnambuco, Alagoas, Sergipe, Bahia and Maranhão, 
in addition to the north of State of Espírito Santo and an area of the state of Minas Gerais included 
in the so-called " polígono das secas " (drought area in Northeastern Brazil). 
 4. Legislation and authority 
 
Both programmes are under the responsibility of SUDAM and SUDENE, as established by 
Supplementary Law 124/2007 and Supplementary Law 125/2007. Law 9532/97 regulates the tax 
exemptions and reductions. Provisional Measure 2199/01, as amended by Law 11196/2005, is the 
most recent regulation on the matter.  
 
                                               
1 The Constitution of Brazil, in it s article 3, item III of Title I, re garding the Fundamental Principles, 
considers that "the fundamental objectives of the Federative Republic of Brazil are to eradicate poverty and substandard living conditions and to re duce social and regional inequaliti es".  In Section IV (article 43, 
paragraph 2, item III) of Chapter VII, Title III, which refers to the Organization of the State considers that "the 
regional incentives shall include, among others, as pr escribed by law, exemptions, reductions or temporary 
deferment of federal taxes owed by individuals or by legal entities".  In article 151, item I, Section II of Title VI, regarding Taxation and Budget considers that "it is forbidden for the Union: to institute a tax which is 
not uniform throughout the entire national territory (...), it being allowed to grant tax incentives for the purposes of promoting the balanced social and economic  development of the various regions of the country".  
In article 165, paragraphs 6 and 7, Section II of Chapte r II, Public Finances, of the previous Title, considers 
that "the budget bill shall be accompanied by a re gionalized statement on th e effect on revenues and 
expenses, deriving from exemptions, fo rgiveness, remissions, subsidies and benefits of a financial, tributary 
and credit nature (§ 6).  The budget set forth (...) in consistence with the pluriannual plan, shall include the 
functions of reducing interregion al inequalities, according to population criteria (§ 7)". G/SCM/N/253/BRA 
 
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  5. Form of subsidy 
 
Income tax exemptions and reductions.2 
 
6. To whom and how the subsidy is provided 
 
Beneficiaries are industrial and agricultural enterprises with undertakings in the Amazon or 
Northeast Regions.  
 7. Total amount 
 
 2011 – R$ million 2012 – R$ million* 
Sudam 1,774.16 1,886.34 
Sudene 3,462.38 3,681.30 
Total 5,236.54 5,567.64 
* estimated values.  
8. Duration 
 
Companies are allowed to submit projects until 31 December 2018. The income tax reduction 
benefit is terminated after 10 years from the date that industry starts its operation. 
 9. Trade effects 
 
N.A. 
 2.2  Investment Funds for the Amazon, the No rtheast Regions and the State of Espírito 
Santo (Finam/Finor/Funres) 
1. Title of programme 
 
"Fundo de Investimento da Amazônia" (Ama zon Investment Fund – FINAM), "Fundo de 
Investimento do Nordeste" (Northeast Region Investment Fund – FINOR) and "Fundo de Recuperação Econômica do Estado do Espírito Santo" (Fund for the Economic Recovery of the State of the Espirito Santo – FUNRES). 
 
2. Period covered by the notification 
 
From January 2011 to December 2012. 
 3. Policy objective and/or purpose 
 To reduce economic and social imbalances between the Brazilian regions by means of 
compensatory mechanisms for the development of the North (Amazon) and Northeast regions and for the state of Espírito Santo. 
 
4. Legislation and authority 
 
FINOR and FINAM previously administered by SUDAM and SUDENE are now under the 
responsibility of the Ministry of National Inte gration (MI). Banco da Amazônia S.A. (BASA), and 
Banco do Nordeste do Brasil S.A. (BNB) are respectively the financial agents of the Funds. FUNRES 
is administered by Grupo de Recuperação Econôm ica do Estado do Espírito Santo (GERES), and 
Banco de Desenvolvimento do Espírito Santo S.A. is the financial agent of this fund. 
 The Secretariat of Federal Revenue of Brazil and th e National Treasury Secretariat of the Ministry 
of Finance are charged with the funding mechanis ms of resources to FINAM, FINOR and FUNRES. 
 
                                               
2 Companies which submitted the project until 14 November 1997 and which were granted income tax 
exemption will be entitled to such benefit until the date specified in the act of concession. G/SCM/N/253/BRA 
 
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  The main legislation is the following: Law 8167, of 16 January 1991; Law 9532, of 
10 December 1997, Law 9808, of 20 July 1999 and Decree-law 880, of 18 September 1969.   5. Form of subsidy 
 Risk capital investments through primary subscripti on of debentures convertible into stock, at a 
ratio of 70% in convertible debentures and 30% in non-convertible debentures. In 2000, 
Provisional Measure 2058 extinguished the non-convertible debentures. The FINAM / FINOR / 
FUNRES tax incentives programs, regulated by Law 8167 of January 16 1991, Law 9532, 10 December 1997, and Law No. 9808 of 20 July 1999, allowed investors deduction of 18% until 2003, 12% from 2004 to 2008 and 9% from 2009 to 2013 of its income tax to be invested in 
the Amazon region and the Northeast. As to Espírito Santo State, the applicable percentages are 
25% by 2003, 17% from 2004 to 2008 and 9% from 2009 to 2013. Tax incentives are channeled through the Amazon Investment Fund (FINAM), th e Northeast Investment Fund (FINOR), or the 
Fund for the Fund for Rehabilitation of the State of Espírito Santo (FUNRES) for investment in 
projects by companies located in those regions which can generate jobs and incomes and promote development. 
 
6. To whom and how the subsidy is provided 
 The beneficiaries are legal persons that implement a project considered to be relevant to the 
region. The project, in order to be implemen ted with FINAM, FINOR or FUNRES financial 
assistance, should involve activities that foster regional or local development.  
7. Total amount 
 
FINOR/FINAM/FUNRES Fiscal benefits (R$ million) 
 
Fiscal Year FINAM FINOR FUNRES 
2011 20.1 200.4 0.89 
2012 46.1 149.5 0.78 
      Source: Ministry of National Integration.  
 
8. Duration 
 
Expiration is scheduled for December 2013 (Law 9532/97). 
 9. Trade effects 
 
N.A.  
  
2.3  Constitutional Funds for Financing the Northeast, the North and the Midwest 
Regions (FNE/FNO/FCO) 
1. Title of programme 
 
"Fundos Constitucionais de Financiamento do Nordeste, do Norte e do Centro-Oeste" (FNE/FNO/FCO): Constitutional Funds for Financin g the Northeast, the No rth, and the Midwest 
Regions.  
 
2. Period covered by the notification 
 
From January 2011 to December 2012. 
 3. Policy objective and/or purpose 
 To reduce economic and social imbalances between the Brazilian regions by means of 
compensatory mechanisms for the development of  the North, Northeast and Midwest regions. 
 G/SCM/N/253/BRA 
 
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  4. Legislation and authority 
 
The Ministry of National Integration and the Deliberative Council of the Development Authorities of the North and Northeast Regions and the Deliberative Council of the Midwest Constitutional 
Financing Fund are the authorities. The financial agents of the Funds are Banco da Amazônia S.A., 
Banco do Nordeste do Brasil S.A. and Banco do Brasil S.A.  
The relevant legislation is the following: Law 7827, of 27 September 1989, as amended by Law 
10177, of 12 January 2001, and Decree 6367, of 30 January 2008.
3 
 5. Form of subsidy 
 Loans.  
6. To whom and how the subsidy is provided 
 
According to the legislation, the beneficiaries of loans backed by Constitutional Fund resources are 
producers and companies, whether natural or legal persons, as well as production cooperatives, 
that carry out productive activities in the crop/livestock, mineral, industrial and agro-industrial, tourism, infra-structure, commerce and service sectors of the North, Northeast and Midwest 
Regions. 
 
7. Total amount 
 
FCO/FNE/FNO Contracted loans (R$ million) 
 
Fiscal Year FCO FNE FNO 
2011  4,786.1 11,090.7 1,869.2 
2012 4,974.0 11,970.0 4,020.0 
 
8.  Duration 
 
Loans backed by Constitutional Financing Fund resources have been granted since 
September 1989. The Constitutional Funds have no pre-established time limits.  9. Trade effects 
 N.A.  
 
2.4  Development Funds for the Amazon and the Northeast Regions (FDA/FDNE) 
1. Title of programme 
 
"Fundo de Desenvolvimento da Amazônia" (FDA ), Amazon Development Fund, and "Fundo de 
Desenvolvimento do Nordeste" (FDNE), Northeast Region Development Fund. 
 
2. Period covered by the notification 
 
From January 2011 to December 2012. 
 
3. Policy objective and/or purpose 
 
To provide funding for productive investments in  the areas covered by SUDAM and SUDENE (see 
p. 7).  
                                               
3 See also Complementary Law 125, of 3 January 2007.   G/SCM/N/253/BRA 
 
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  4. Legislation and authority 
 
Authorities are the Ministry of National Integration, SUDAM/ADA, SUDENE/ADENE and the Deliberative Council of the Development Authoritie s of the North and Northeast Regions. Banco da 
Amazônia S.A. and Banco do Nordeste do Brasil  S.A. are the financial agents of the Funds. 
 The relevant legislation is Provisional Measures 2156-5 and 2157-5 (articles 4, 5 and 6 of both).
4 
 
5. Form of subsidy 
 Loans in the form of convertible debentures. 
 
6. To whom and how the subsidy is provided 
 
The beneficiaries of loans backed by Developmen t Fund resources are enterprises that carry out 
productive activities in the sectors of crop/livestock, mineral, industrial and agro-industrial, tourism, and infra-structure in the Amazon and Northeast regions. 
 
7. Total amount 
 
FDA/FDNE Contracted loans (R$ million) 
 
  
 
  
 
  8. Duration 
 Loans backed by Development Fund resources have been granted since 2006 with the deadline of December 2013. 
 
9. Trade effects 
 
N.A. 
  2.5  Regional Development and Promotio n of R&D and Technological Innovation 
Programme 
1. Title of programme 
 
Regional Development and Promotion of Research  and Development and Technological Innovation 
Programme.   
2. Period covered by the notification 
 
From January 2011 to December 2012.  
3. Policy objective and/or purpose 
 
Reduce economic and social imbalances betwee n Brazilian regions by means of compensatory 
mechanisms for the development of the North,  Northeast and Midwest. Regions and promote 
investment in research, development and technological innovation in the North, Northeast and Midwest regions. For the purpose of the programme  the Midwest region does not comprise Federal 
District. 
 
                                               
4 As amended by article 19 and 16 of Law Complementary 125 and 124, dated 3 January 2007. Fiscal Year FDA FDNE 
2011 1.189,5 1.784,2 
2012 1.178,4 2.005,1 G/SCM/N/253/BRA 
 
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  4. Legislation and authority 
 
Law 9.826/1999 amended by Law 12.218/2010.  
The Ministry of Development, Industry and Fo reign Trade and the Ministry of Finance are 
responsible for determining the requirements fo r the submission of project's application and 
approval. The Ministry of Development, Indust ry and Foreign Trade is responsible for the 
evaluation, approval and monitoring the programm e. The Ministry of Science and Technology is 
responsible for verifying the proof of investment  in research and development and technological 
innovation in the regions covered by the programme.    
5. Form of subsidy 
 
Reduction of 32% of IPI levied on sales of produc ts classified in codes 8702 a 8704 of the Table of 
Incidence of IPI. The reduction is applied on products produced in the domestic market or directly 
imported by the beneficiaries.   
The beneficiaries shall invest, at least, 10% of the value corresponding to IPI reduction in research 
and development and technological innovation in the regions covered by the programme.   6. To whom and how the subsidy is provided 
 Beneficiaries are industrial enterprises installed in the areas covered by SUDAM, SUDENE and in 
the Midwest region. Beneficiaries shall invest, at least, 10% of the value corresponding to IPI 
reduction in research and development and technolo gical innovation in the regions covered by the 
programme. Project submitted by beneficiaries shall be approved by the Mini stry of Development, 
Industry and Trade Foreign. 
 
7. Total amount (R$ million) 
 Fiscal Year 2011: R$ 1,562.00 
Fiscal Year 2012: R$ 1,571.00  
 8. Duration 
 Expiration is scheduled for December 2015 (Law 12.218/2010).  
9. Trade effects 
 
N.A.  
 
3  FISHERIES INCENTIVES 
3.1  Diesel Oil Price Equalization Scheme 
1. Title of programme 
 
Programme for Economic Subvention to the Price of Diesel Oil Used by Fishing Vessels. 
 
2. Period covered by the notification 
 From January 2011 to December 2012.  
 
3. Policy objective and/or purpose 
 
The main objective of the program is to equalize the price of maritime diesel paid by fishing 
companies or fishermen to its price in the international market.   G/SCM/N/253/BRA 
 
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  4. Legislation and authority 
 
The program was established by Law nº 9.445,  of 14 March 1997 and, regulated by Decree 
nº7.077, of 26 January 2010. 
 
In order to benefit from this equalization scheme the fishing companies or fishermen must comply with administrative procedures set by regulation by the Ministry of Fisheries and Aquaculture, 
which take into account vessel control and other administrative issues. 
 The Ministry of Fisheries and Aquaculture is responsible for the administration of the program.  
5. Form of subsidy 
 
This equalization encompasses the reimbursement of  the difference between the price of maritime 
diesel in Brazil and international markets. However,  this equalization payment is limited to 25% of 
the price of maritime diesel at the refinery level.  
6. To whom and how the subsidy is provided 
 
Recipients: Fishing vessel owners or charters (natural or legal persons); professional fishermen and fishing industries.  
 
In operational terms, the beneficiaries pay the regu lar national price of maritime diesel (with the 
tax exemption of the ICMS). Subsequently, the Ministry of Fisheries and Aquaculture will 
reimburse to the beneficiary the difference between the price paid and the international market 
price, up to the limit of 25% of the maritime diesel price at the refinery level.   
At the end of each fiscal year, a public regulation issued by the Ministry of Fisheries and 
Aquaculture establishes the beneficiaries (company, cooperative, association or fishermen), by state level (regional) and the maximum amount of the reimbursement that will be available for the 
following year for each of those beneficiaries. 
 
7. Total amount 
 
Fiscal Year 2011: R$ 17.2 million 
Fiscal Year 2012: R$ 2.8 million  
8. Duration 
 
N.A.  
9. Trade effects 
 
N.A. 
 
 3.2  Programme for Vessel Fleet Enlargement and Modernization 
1. Title of programme 
 
National Programme for Financing the Enlargement and Modernization of National Fishing Fleet – PROFROTA Pesqueira. 
 
2. Period covered by the notification 
 
From January 2011 to December 2012.  
 3. Policy objective and/or purpose 
 Construction, acquisition and improvements of fishing vessels in order to enhance the ocean fishing fleet, taking into consideration environmental criteria of sustainability (including management of fishing effort). G/SCM/N/253/BRA 
 
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  Replacement of coastal and continental fleet fishing vessels with the objective to renew them, 
taking into consideration environmental criteria of sustainability (including management of fishing effort).  
Modernization, conversion, equipping and adaptation of fishing vessels, to enhance the 
management control on fishing effort, taking into consideration environmental criteria of sustainability. 
 
4. Legislation and authority 
 The program was established by Law nº 10.948,  of 23 May 2004 and regulated by Decree no. 
5.474, of 22 June 2005 and by Decree no. 6.746, of 22 January 2009. 
 The Ministry of Fisheries and Aquaculture is responsible for the administration of the program. 
 
In order to benefit from this Programme the beneficiaries must comply with administrative procedures set by regulation by the Ministry of Fisheries and Aquaculture. 
 
5. Form of subsidy 
 A "non-default" bonus ("paid-on time" installment performance bonus) calculated on the interest 
due of the financed amount, taking into consideration environmental, social and targeted species 
stimulus issues.  
This performance bonus can be granted to the loan taker, in a non-cumulative way, to be 
calculated only on the interest amount of the loan. It is only granted when the installment of the loan is paid on time, and taking into consideration sustainability criteria and improvements in the 
working conditions for the workers in the vessel. 
 The bonuses can be of 5%, 20% and 30%.  
6. To whom and how the subsidy is provided 
 
Recipients: Fishing vessel owners or charters (natural or legal persons); professional fishermen 
and fishing industries.  
 Recipients: Industrial fishing companies (natural or legal persons and cooperatives dedicated to 
fishing activities) 
 The bonus is granted only when the installment of the loan is paid on time and sustainability criteria and improvements in the working conditions for the workers in the vessel are met. In 
operational terms, it generates a discount in the interest payment to be made on that installment. 
 7. Total amount 
 Fiscal Year 2011: R$ 0.00. Fiscal Year 2012: R$ 0.00. 
 
The Program is non-operational since 2008, since the foreseen results were not met. The last disbursement took place in 2010.  
The Program is being redesigned by the Federal Government in order to facilitate its use in 
operational terms and encompass more beneficiaries.  
8. Duration 
 
Up to 2015 (deadline for the discontinued Program) 
 
9. Trade effects 
 N.A. 
__________