WORLD TRADE  
ORGANIZATION   
G/SCM/Q2/BRA/34 
26 July 2012 
 (12-4098) 
Committee on Subsidies 
and Countervailing Measures Original:   English 
 
 
 
SUBSIDIES 
 
Questions Posed by CANADA Regarding the  
New and Full Notification of BRAZIL1 
   The following communication, dated 24 July 2012, is being circulated at the request of the 
Delegation of Canada. 
 
_______________ 
 
 
Question 1 
  Canada understands that Brazil has a numbe r of agricultural programmes including the 
"Prêmio para Escoamento do Produto" (PEP) progra mme, the Agricultural and Livestock Plan (ALP), 
the Federal Government Acquisition Programme  (AGF) and credit programmes under Sistema 
Nacional de Crédito Rural.  We note the absen ce of agriculture related programmes Brazil's 
notification.  Could Brazil elaborate as to the rationa le for the absence of agricultural programs in its 
notification? 
 
Question 2 
 
 BNDES has a programme entitled "Pró-Aeronáutic a" which provides long term financing to 
support investments made by SMEs which are part of the Brazilian aircraft industry production chain.  
Pró-Aeronáutica has two modalities:  Empresa (companies) and Exportação (exports).  The Empresa 
modality finances the development of aeronautical pr oducts and services in partnership model risk.  
The Exportação modality finances the production of goods and services for exports.  According to BNDES' web site, the programme creates "special c onditions" in order to allow the SMEs have access 
to BNDES financing, to grow and meet th e demand both domestically and from abroad.
2 
 
 On a related note, Canada understands that B NDES' "Taxa de Juros de Longo Prazo" (TJLP), 
which is used to establish BNDES's financing rate , varied between 6 and 6.25% per year for the 
period covered by the present notification (2009-2010).3  In an August 2010 article4, The Economist 
reported that this rate was "… well below the yield on ten-year government bonds of 12%.  The 
Treasury subsidizes the difference, which on $100  billion of outstanding loans, would be some 
$6 billion a year".  
                                                      
1 G/SCM/N/220/BRA. 
2"http://www.bndes.gov.br/SiteBNDES/bndes/bndes_p t/Institucional/Sala_de_Imprensa/Noticias/2007/
20070920_not212_07.html " 
 3"http://www.bndes.gov.br/SiteBNDES/bndes/bndes _pt/Ferramentas_e_Normas/Custos_Financeiros/T
axa_de_Juros_de_Longo_Prazo_TJLP/index.html " 
 4 http://www.economist .com/node/16748990  G/SCM/Q2/BRA/34 
Page 2  
 
   Could Brazil provide information on BNDES's Pr ó-Aeronáutica" including the financing rates 
and amounts disbursed under each modality?  
INDUSTRIAL INCENTIVES 
 
Support Programme for the Development of  the Pharmaceutical Productive Chain 
(PROFARMA –Innovation)  Question 3 
  According to the description for this progr amme, the subsidy may take the form of 
"participation in the project's revenues".  Could Brazil provide more detail on what is meant by 
"participation in the project's revenues" and on how support is provided through this method?  Could 
Brazil specify which companies or types of compan ies have received support under this programme?  
Could Brazil confirm that this progra mme will expire in August 2012?   
 
Productive Development Policy (PDP) 
 Question 4 
 
 Could Brazil identify the criteria that companies must satisfy in order to be eligible for the 
Productive Development Policy's suppo rt programme?  Could Brazil specify whether this support is 
based either partly or wholly on export performance?  
Regional Incentives B. Investment Funds for the Amazon, the Northeast Regions and the State 
of Espirito Santo (Finam/Finor/Funres) 
 
Question 5 
 
 Brazil has notified that Investment Funds fo r the Amazon, the Northeast Regions and the 
State of Espirito Santo are delivered through pr imary subscription of debentures convertible into 
stock, at a ratio of 70 per cent in convertible debentures and 30 per cent in non-convertible 
debentures.  In 2000, Provisional Measure 2058 extin guished the non-convertible debentures.  Could 
Brazil explain why convertible debentures are preferred?  Further, Brazil has indicated that the beneficiaries of the subsidy are lega l persons that implement a project c onsidered to be relevant to the 
region.  Could Brazil specify which companies or  types of companies have received support under 
this programme?  Do these subsidies benef it the agricultural sector in particular? 
 
FISHERIES INCENTIVES 
 
Programme for Diesel Oil Support 
 
Question 6 
 
 Could Brazil clarify how the "international price" of diesel was calculated?  Could Brazil elaborate on whether there is any fishing sustainability  criteria for vessels or fi sherman to be eligible 
to receive support under this progr amme?  Could Brazil confirm whet her this programme is ongoing?  
  G/SCM/Q2/BRA/34 
 Page 3 
 
 
  National Programme for Financing the Enlargement and Modernization of National Fishing 
Fleet – PROFROTA  Question 7  
 Could Brazil elaborate on the sustainability crite ria for qualified projects to be eligible to 
receive support under this programme?  Could Braz il elaborate on whether any performance bonus 
has been denied as a result of failing to meet these criteria?    
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