RESTRICTED  
  
WT/TPR/S/283  
17 May 2013  
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Trade Policy Review Body   
 
TRADE POLICY REVIEW 
REPORT BY THE SECRETARIAT 
BRAZIL 
This report, prepared for the sixth Trade Policy Review of Brazil, has been drawn up by the WTO 
Secretariat on its own responsibility. The Secr etariat has, as required by the Agreement 
establishing the Trade Policy Review Mech anism (Annex 3 of the Marrakesh Agreement 
Establishing the World Trade Organization), sought clarification from Brazil on its trade policies and 
practices.  Any technical questions arising from this report may be addressed to Angelo Silvy 
(tel.: 022 739 5249), Martha Lara (tel.: 022 739 6033), Rosen Marinov (tel.: 022 739 6391). 
 Document WT/TPR/G/283 contains the policy statement submitted by Brazil. 
 
 
Note: This report is subject to restricted circulation and press embargo until the end of the first 
session of the meeting of the Trade Policy Review  Body on Brazil. This report was drafted in 
English. WT/TPR/S/283 • Brazil 
 
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  CONTENTS 
SUMMARY ....................................................................................................................... . 8 
Economic envi ronment ...................................................................................................... 8  
Trade and investment policy framework ............................................................................... 9  
Trade policy by  measure .................................................................................................... 9  
Trade policy by  sector ...................................................................................................... 11 
1   ECONOMIC ENVIRONMENT ........................................................................................ 14  
1.1   Overview ................................................................................................................. 14 
1.2   Output and Employment ............................................................................................ 14 
1.3   Fisca l Policy ........................................................................................................... .. 17 
1.4   Monetary and Ex change Rate  Policy ............................................................................ 19 
1.5   Balance of Payments ................................................................................................. 22 
1.6   Structural Issues and Policy Responses ........................................................................ 23 
1.7   Developments in Tr ade and Invest ment Flows .............................................................. 25 
1.7.1   Mercha ndise trade ................................................................................................. 25 
1.7.1.1   Compos ition of trade ........................................................................................... 25 
1.7.1.2   Direct ion of trade ................................................................................................ 27 
1.7.2   Trade in services ................................................................................................... 28 
1.7.3   Foreign di rect inve stment........................................................................................ 30 
2   TRADE POLICY REGIME: FR AMEWORK AND OB JECTIVES .......................................... 33  
2.1   Introduction ............................................................................................................. 33 
2.2   General Legal and Institutional Framework ................................................................... 33 
2.3   Trade Policy Formulation an d Implementation and Objectives ......................................... 34 
2.4   Foreign Inve stment Regime ....................................................................................... 35 
2.5   Internatio nal Relations .............................................................................................. 37 
2.5.1   World Trade Organization ........................................................................................ 37 
2.5.2   Preferential agreements .......................................................................................... 39 
2.5.2.1   Gene ral features ................................................................................................. 39 
2.5.2.2   MERCOSUR ........................................................................................................ 40 
2.5.2.3   Other trade arrangements and agreements ............................................................. 41 
2.6   Aid for Trade ............................................................................................................ 43 
3   TRADE POLICIES AND PRACTICES BY MEASURE ........................................................ 44  
3.1   Introduction ............................................................................................................. 44 
3.2   Measures Direct ly Affectin g Imports ............................................................................ 45 
3.2.1   Procedures ........................................................................................................... 45 
3.2.2   Customs valuatio n and rules of origin ....................................................................... 48 
3.2.3   Tariffs ............................................................................................................... ... 49 
3.2.3.1   Applied MFN tariff ............................................................................................... 49 
3.2.3.2   Bindings ............................................................................................................  53 
3.2.3.3   Preferences ........................................................................................................ 53 WT/TPR/S/283 • Brazil 
 
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  3.2.4   Other charge s affecting imports ............................................................................... 55 
3.2.5   Duty and tax exem ptions and co ncessions ................................................................. 57 
3.2.6   Import prohibitions, restrictions, an d licensing ........................................................... 57 
3.2.7   Continge ncy measures ........................................................................................... 59 
3.2.7.1   Overview ........................................................................................................... 59 
3.2.7.2   Anti-dumping and countervailing measures ............................................................. 59 
3.2.7.2.1   Legislatio n and instit utions ................................................................................ 59 
3.2.7.2.2   AD/CVD use during the review period .................................................................. 62 
3.2.7.3   Safeguard measures ............................................................................................ 62 
3.2.8   Technical regulations, co nformity assessment, and standards ....................................... 62 
3.2.9   Sanitary and ph ytosanitary measures ....................................................................... 65 
3.2.10   Othe r measures ................................................................................................... 67 
3.3   Measures Directly Affecting Exports ............................................................................. 67 
3.3.1   Procedures and docume ntation ................................................................................ 67 
3.3.2   Expo rt taxes ......................................................................................................... 69 
3.3.3   Export prohibitions, restrictions, and licensing ............................................................ 70 
3.3.3.1   Export prohibitions .............................................................................................. 70 
3.3.3.2   Export restrictio ns, quotas, an d licences ................................................................. 70 
3.3.4   Export support an d related tax measures .................................................................. 71 
3.3.4.1   Export subsidies.................................................................................................. 71 
3.3.4.2   Reintegra  programme .......................................................................................... 71 
3.3.4.3   Drawback .......................................................................................................... 72 
3.3.4.4   Special System of Industrial Depo ts subject to Standardized Control (RECOF) .............. 73 
3.3.4.5   Special Regime for the Purchase of Capital Goods for Exporting Enterprises 
(RECAP) ....................................................................................................................... .. 73 
3.3.4.6   Definition of Predominantly Export-oriented Enterprises ............................................ 74 
3.3.4.7   Special Regime for the Information Technology Exportation Platform (REPES) .............. 74 
3.3.4.8   Export-p rocessing zones ...................................................................................... 74 
3.3.5   Export finance, in surance, and guarantees ................................................................ 75 
3.3.5.1   Overview ........................................................................................................... 75 
3.3.5.2   Export Financ ing Programme  (PROEX) ................................................................... 75 
3.3.5.3   Export Fina ncing Fund (FFEX) ............................................................................... 76 
3.3.5.4   BNDES export  financing progra mmes ..................................................................... 77 
3.3.5.5   Other export financing programmes ....................................................................... 78 
3.3.5.6   Export insu rance and gu arantees........................................................................... 79 
3.3.6   Export promotion and marketing assistance ............................................................... 80 
3.4   Measures Affectin g Production and Trade ..................................................................... 81 
3.4.1   Competition policy and price controls ........................................................................ 81 
3.4.1.1   Competition policy .............................................................................................. 81 
3.4.1.2   Pric e contro ls ..................................................................................................... 83 
3.4.2   In centives ............................................................................................................  84 WT/TPR/S/283 • Brazil 
 
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  3.4.2.1   General characteristics ......................................................................................... 84 
3.4.2.2   Industri al incent ives ............................................................................................ 87 
3.4.2.3   Region al prog rammes .......................................................................................... 88 
3.4.2.3.1   SUDAM an d SUDENE pr ogramme s ...................................................................... 88 
3.4.2.3.2   Development Funds for the Amazon  and the North-East Regions (FDA /FDNE) ........... 89 
3.4.2.3.3   FINA M/FINOR/FU NRES ...................................................................................... 89 
3.4.2.3.4   Constitutional funds for financin g the north-east, the north and the mid-west 
regions (FNE /FNO/F CO) .................................................................................................... 90 
3.4.2.3.5   Regional Development and Prom otion of R&D and Technological Innovation 
Programme .....................................................................................................................  91 
3.4.2.3.6   Other re gional programmes ............................................................................... 92 
3.4.2.4   Free-trade zones ................................................................................................. 92 
3.4.2.5   R&D and other prog rammes ................................................................................. 94 
3.4.2.6   BNDES credit facilitation schemes .......................................................................... 97 
3.4.2.7   Other schemes ................................................................................................... 98 
3.4.3   State-owned enterprises, privatization, an d state-trading ............................................ 99 
3.4.4   Government  Procurement ..................................................................................... 102  
3.4.4.1   Genera l features ............................................................................................... 102  
3.4.4.2   Legislation ....................................................................................................... 1 03 
3.4.5   Intellectual property rights .................................................................................... 106  
3.4.5.1   Genera l features ............................................................................................... 106  
3.4.5.2   Legal and inst itutional framework ........................................................................ 107  
3.4.5.2.1   General laws .................................................................................................. 107  
3.4.5.2.2   Indust rial property ......................................................................................... 109  
3.4.5.2.2.1   Main bodies ................................................................................................ 109  
3.4.5.2.2.2   Patents an d industrial designs ....................................................................... 109  
3.4.5.2.3   Trademarks ................................................................................................... 113  
3.4.5.2.4   Other forms of industrial property ..................................................................... 114  
3.4.5.2.4.1   Geograph ical indica tions ............................................................................... 114  
3.4.5.2.4.2   Layout of integrated circuits .......................................................................... 114  
3.4.5.2.4.3   Plant varieties ............................................................................................. 115  
3.4.5.2.4.4   Undisclosed information ................................................................................ 115  
3.4.5.3   Copyright ......................................................................................................... 115  
3.4.5.4   Enforcement ..................................................................................................... 116  
4   TRADE POLICIES BY SECTOR ................................................................................... 118  
4.1   Introduction ........................................................................................................... 118  
4.2   Agriculture, Fore stry, and Fi sheries ........................................................................... 119  
4.2.1   Genera l features .................................................................................................. 119  
4.2.2   Border  measures ................................................................................................. 120  
4.2.3   Domestic su pport meas ures .................................................................................. 121  
4.2.3.1   Genera l features ............................................................................................... 121  WT/TPR/S/283 • Brazil 
 
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  4.2.3.2   Rural credit ...................................................................................................... 1 22 
4.2.3.2.1   Gene ral features ............................................................................................ 122  
4.2.3.2.2   Rural credit government pr ogrammes ............................................................... 125  
4.2.3.2.3   BNDES credit lines .......................................................................................... 125  
4.2.3.3   Minimum pr ice guarantees ................................................................................. 127  
4.2.3.4   Measures to pr omote family farming .................................................................... 129  
4.2.3.5   Other domestic  support me asures ....................................................................... 130  
4.3   Manufac turing ........................................................................................................ 13 1 
4.4   Energy ..................................................................................................................  136 
4.4.1   Overview ............................................................................................................ 1 36 
4.4.2   Genera l features .................................................................................................. 136  
4.4.3   Hydrocarbons ...................................................................................................... 137  
4.4.3.1   Market features ................................................................................................ 137  
4.4.3.2   Regulato ry framew ork ....................................................................................... 138  
4.4.3.3   Biofuels ........................................................................................................... 142 
4.4.4   El ectricity ...........................................................................................................  144 
4.4.4.1   Market features ................................................................................................ 144  
4.4.5   Regulato ry framework .......................................................................................... 144  
4.5   Services ................................................................................................................  147 
4.5.1   Banking, finance, and insurance ............................................................................. 147  
4.5.1.1   Overview ......................................................................................................... 14 7 
4.5.1.2   Main features ................................................................................................... 148  
4.5.1.3   Banking ........................................................................................................... 1 49 
4.5.1.3.1   General features  and market de velopment ......................................................... 149  
4.5.1.3.2   Legal and re gulatory fr amework ....................................................................... 150  
4.5.1.4   In suranc e ........................................................................................................ 15 2 
4.5.1.5   Securities ........................................................................................................ 1 54 
4.5.2   Communicati on services ....................................................................................... 155  
4.5.2.1   Main features ................................................................................................... 155  
4.5.2.2   Regulato ry framew ork ....................................................................................... 157  
4.5.3   Air transport and airports ...................................................................................... 160  
4.5.3.1   Main features ................................................................................................... 160  
4.5.3.2   Regulato ry framew ork ....................................................................................... 161  
4.5.3.2.1   Air tran sport serv ices ...................................................................................... 161  
4.5.3.2.2   Airports and auxiliary services .......................................................................... 163  
4.5.4   Maritime tr ansport and ports ................................................................................. 164  
4.5.4.1   Main features ................................................................................................... 164  
4.5.4.2   Regulato ry framew ork ....................................................................................... 165  
4.5.4.2.1   Maritime transport services .............................................................................. 165  
4.5.4.2.2   Ports ............................................................................................................ 167 WT/TPR/S/283 • Brazil 
 
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  4.5.5   Profession al services ............................................................................................ 169  
4.5.5.1   Genera l features ............................................................................................... 169  
4.5.5.2   Legal services ................................................................................................... 169  
4.5.5.3   Accounting and auditing se rvices ......................................................................... 170  
4.5.5.4   Architectural and urban planning services ............................................................. 171  
REFERENC ES ................................................................................................................ 173  
GLOSSARY .................................................................................................................... 177  
5   APPENDIX TABLES .................................................................................................. 184  
 
CHARTS 
 
Chart 1.1 Merchandise trade,  by product,  2007 and 2012 ...................................................... 26 
Chart 1.2 Trade balance by sector, 2007-12 ........................................................................ 27 
Chart 1.3 Merchandise trade, by main origin and destinat ion, 2007 an d 2012 ........................... 28 
Chart 3.1 Frequency distribution  of MFN tariff  rates,  2012...................................................... 51 
Chart 3.2 Distribution of the M FN tariff by ISIC  sector , 2012 .................................................. 52 
Chart 4.1 Main agricultur al exports, 2007-12 ..................................................................... 120  
Chart 4.2 Trade in manufac tured products , 2006-12  ........................................................... 132  
 
TABLES 
 
Table 1.1 Basic economic  indicators , 2007- 12 ...................................................................... 15 
Table 1.2 Public sector fiscal balance, 2007-12 ..................................................................... 18 
Table 1.3 Main monetary indicators, 2007-12 ....................................................................... 21 
Table 1.4 Balance of payments, 2007-12 ............................................................................. 23 
Table 1.5 Trade in  services , 2007- 12 .................................................................................. 29 
Table 1.6 Foreign direct investment (equity) inflows by  country, 2007-12  ................................ 30 
Table 1.7 Foreign direct investment (equity) inflows by  sector, 2007-12 .................................. 31 
Table 2.1 WTO dispute settlement cases invo lving Brazil, January 2009-December  2012 ............ 38 
Table 2.2 Scope of selected preferential agreements ............................................................. 39 
Table 2.3 Preferential agreements, 2008-12 ........................................................................ 41 
Table 3.1 Distribution of ID by fiscal examination channel, 2010-12  ........................................ 47 
Table 3.2 Structure of the MFN tariff schedule, 2008 and 2012 ............................................... 50 
Table 3.3 Summary analysis of  Brazil's MFN tariff, 2012 ........................................................ 50 
Table 3.4 Summary analysis of tariffs a ccording to preferential agreements, 2012 ..................... 54 
Table 3.5 Import prohibitions, 2012 .................................................................................... 58 
Table 3.6 Export taxes, 2008-11  ........................................................................................ 69 
Table 3.7 BNDES total disbursements for exports of goods an d services , 2008-12  ..................... 78 
Table 3.8 Competition enforcement, 2008-12 ....................................................................... 82 
Table 3.9 Regulate d prices , 2012  ....................................................................................... 83 
Table 3.10 Programmes notified to the WTO, 2009 and 2010 ................................................. 85 WT/TPR/S/283 • Brazil 
 
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  Table 3.11 Tax exemption/reductions under industrial incentives  programme s, 2007- 11 ............ 87 
Table 3.12 Tax exemptions/reductions under the SUDAM and SUDENE programmes, 
2007-1 1 ....................................................................................................................... .. 89 
Table 3.13 Tax exemptions/reductions under  the FDA and FDNE programmes,  2007- 11 ............. 89 
Table 3.14 FINOR/FINAM/FUNRES , FISCAL BENE FITS, 2007- 11 .............................................. 90 
Table 3.15 Constitutional  fund loan s, 2007- 11 ..................................................................... 91 
Table 3.16 Manaus free-trade zone producti on, 2007- 12 ....................................................... 94 
Table 3.17 Sectoral science, technology, and innovation (S, T&I) fund s, 2012 .......................... 95 
Table 3.18 Brazilian developm ent bank suppo rt, 2008-12 ...................................................... 97 
Table 3.19 BNDES disbursements by credit scheme, 2007-12 ................................................. 98 
Table 3.20 Key features of Brazilian state-trading enterp rises (STEs) .................................... 100  
Table 3.21 State-owned enterpri ses created si nce 2008 ...................................................... 101  
Table 3.22 Decrees establishing preference margins for national products in public 
tendering ...................................................................................................................... 104  
Table 3.23 Balance of royalt ies and income s, 2007-11  ........................................................ 106  
Table 3.24 Balance of lice nsing contract s, 2008- 11 ............................................................. 106  
Table 3.25 Overview of IPR protecti on, 2012 ...................................................................... 108  
Table 3.26 Patents applications and decisions, 2005-14 ....................................................... 111  
Table 3.27 Trademark applicatio ns registrati ons, 2007- 12 ................................................... 114  
Table 4.1 Brazil's agribusine ss trade balanc e, 2007-12  ........................................................ 119  
Table 4.2 Main agricultural suppo rt measures an d programmes ............................................ 121  
Table 4.3 Sources of rural credit, 2007-12 ......................................................................... 123  
Table 4.4 Federal Government agricultural credit programmes administered by the BNDES, 
harvest year  2011/1 2 ..................................................................................................... 126  
Table 4.5 Price support programmes, 2012 ........................................................................ 128  
Table 4.6 Budget allocated to family farming programmes and measures, harvest year 
2012/1 3 .......................................................................................................................  129 
Table 4.7 Timetable for compliance with INOVAR-AUTO Programme requirements 
(manufacturing companies) ............................................................................................. 134  
Table 4.8 Regulatory framework for oil and gas exploration and production ............................ 139  
Table 4.9 Main Brazilian ports, cargo movement (t onnes), 2008-11 ....................................... 167  
 
APPENDIX TABLES 
 
Table A1.1 Merchandise exports by  groups of prod ucts, 2007- 12 .......................................... 184  
Table A1.2 Merchandise imports by  groups of prod ucts, 2007- 12 .......................................... 185  
Table A1.3 Merchandise exports by trading part ner, 2007- 12 ............................................... 186  
Table A1.4 Merchandise imports by trading part ner, 2007- 12 ............................................... 187  
Table A2.1 Status of notification requirements to the WTO, March 2013 ................................. 188  
Table A3.1 BNDES selected expo rt finance prog rammes, 2013 ............................................. 190  
Table A4. 1 Brazil's Air Tr ansport Agreem ents, 2012  ........................................................... 192  
 WT/TPR/S/283 • Brazil 
 
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  SUMMARY 
 1. Brazil weathered the global economic crisis well, supported by strong domestic and foreign 
demand and sound macroeconomic policies. Brazil has also contributed to global economic 
recovery by substantially increasing imports. So lid economic growth and active incomes policies 
have allowed Brazil to make progress towards reducing poverty, unemployment, and income 
inequality. 
2. Further action is required to address long-standing structural shortcomings affecting the 
Brazilian economy's competitiveness, such as inadequate infrastructure, insufficient access to credit, and high taxes. The Government has taken measures to deal with these problems but in its quest to support sectors affected by a loss of co mpetitiveness it has also adopted some measures 
that may have a restrictive impact on trade. Given the size and importance of Brazil’s economy, it 
is important for it to continue to open its market to trade and investment flows and for its policies be conducive to growth. 
Economic environment 
3. The Brazilian economy recorded a strong perf ormance during most of the 2007-12 period, 
with real GDP growth averaging 3.6% a year, albe it with important fluctuations. Growth benefitted 
from strong domestic demand and favourable exte rnal conditions, including vigorous demand and 
high international prices for Brazilian commodities, which boosted the country's terms of trade. Growth was supported by sound macroeconomic policies, focused on achieving a primary fiscal surplus and strict inflation targets, and a floating exchange rate regime, which contributed to 
consolidate macroeconomic stability. Helped by an appreciating currency, and despite strong 
domestic demand growth, inflation has been kept  under control, generally within the band of 
fluctuation allowed by the inflation-targeting policy. Sustained economic growth over almost a 
decade and active income policies have allowed Brazil to make important progress towards 
reducing poverty and income inequality, wh ile employment figures have improved.  
4. Since the second half of 2011, however, gr owth has decelerated significantly and the 
average real growth rate for 2012 was just 0.9%. Th is loss of dynamism may be partly attributed 
to the appreciation of the Brazilian real and the global economic slowdown, but it also reflects long-standing structural problems affecting the Brazilian economy's competitiveness such as inadequate infrastructure, insufficient access to credit, and a very high tax burden. To address 
these problems, the Government has adopted me asures aimed at removing infrastructure 
bottlenecks, expanding concessions and private-public sector partnerships, and reducing the tax burden on certain manufacturing industries. Howe ver, to support sectors affected by a loss of 
competitiveness, the Government has also taken some measures that have a restrictive impact on 
trade, including increasing tariffs temporarily, and using preferential margins for domestic goods and services in government procurement, and has increased export credits. The authorities have 
also taken measures to increase the availability of credit and the low level of financial 
intermediation. In mid-2011 the Central Bank lowere d the policy interest rate (SELIC) to record-
low levels by Brazilian standards. On the fiscal side, the Government was able to provide stimulus while maintaining a primary surplus throughout the review period.  
5. The period under review was particularly dynamic for Brazil’s foreign trade. Exports 
increased at an average rate of 8.6% between 200 7 and 2012, reflecting strong external demand 
for its commodities. Mining and agricultural export s accounted for most of this growth, increasing 
at annual averages of 15.4% and 12.3%, respectively. Exports of manufactured products 
increased at an annual average rate of only 1.8% , and their share in overall merchandise exports 
decreased significantly, from 46.6% in 2007 to 33.8% in 2012. The share of primary products 
increased from 50.1% to 62.7%, due in particular to the strong performance of mining 
commodities. 
6. Import growth outpaced exports during the period under review, expanding at an annual 
rate of 13.1% between 2007 and 2012 and causing the trade surplus to shrink. Brazil's trade 
deficit in the manufacturing sector increased sharply, with imports of manufactured products 
growing at an average annual rate of 16.2% duri ng the period, and accounting for 73.1% of total 
imports in 2012. Brazil's structural deficit in the services trade balance also widened during the 
review period, largely on account of higher payments for leasing capital equipment, travel, and 
transportation. After years of consecutive surpluses,  Brazil's current account plunged into a deficit WT/TPR/S/283 • Brazil 
 
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  in 2008; the deficit has persisted, and was around 2.4% of GDP in 2012. However, large capital 
inflows, especially foreign direct investment (FDI), have more than offset the current account deficit. In mid-2012, Brazil was the world's sixth largest recipient of FDI.  
7. The review period was marked by a strengthening of Brazilian trade ties with Asia, in 
particular with China. Nevertheless, the European  Union remained Brazil's major trade partner, as 
both an export destination and a source of imports.  
Trade and investment policy framework 
8. Brazil attaches particular importance to its participation in the multilateral trading system, 
considering it fundamental to attaining its development objectives based on sustainable and socially inclusive economic growth. The Plano Brasil Maior enunciates and develops a number of 
industrial, technological, and foreign trade policies to underpin its development objectives. 
9. Brazil is one of the WTO's most active participants, individually, and within the BRICS group 
of leading emerging economies. Brazil remains committed to strengthening the multilateral trade system and to the successful conclusion of the Doha Development Agenda (DDA), where it has 
presented, independently and together with other delegations, a number of proposals related to, 
inter alia, agriculture, trade in services, intellectu al property rights, and trade rules. Brazil did not 
ratify the Fourth Protocol on telecommunications and is undertaking domestic procedures to ratify 
fully the Fifth Protocol on financial services. From October to 2008 to October 2012, Brazil initiated 
three complaints under the WTO dispute settlement mechanism. 
10. One of Brazil's policy aims is to strengthen regional economic integration. Brazil is a 
founding member of the Southern Common Market (M ERCOSUR), and as such it has subscribed to 
preferential trade agreements with the Plurinat ional State of Bolivia, Chile, Colombia, Cuba, 
Ecuador, Mexico, Peru, and the Bolivarian Republ ic of Venezuela. Together with its MERCOSUR 
partners, Brazil also has preferential trade agreem ents currently in force with India and Israel, and 
three further agreements pending entry into force. Additionally, it has bilateral preferential 
agreements under LAIA with Guyana and Suri name. The European Union and MERCOSUR have 
re-launched negotiations in order to create a Bi-regional Free Trade Agreement.  
11. Foreign investors in Brazil receive the same legal treatment as local investors in most 
economic sectors, following Constitutional amendments passed in 1995, which prohibit all forms of discrimination not explicitly foreseen in the law. However, foreign investment is restricted in health, mass media, and telecommunications, aerospace industry, rural property, maritime and air 
transport. The Federal Government seeks to promote private investment, particularly in transport 
infrastructure, energy, aeronautics, and other technology-intensive sectors, in order to overcome production bottlenecks, spur competitiveness, and uphold economic growth. The investment 
incentives offered to investors generally consist of tax exemptions and low-cost financing; 
normally, they do not distinguish between domestic and foreign investors. 
Trade policy by measure 
12. During the review period, Brazil took furthe r steps to simplify and modernize its customs 
procedures. Import declarations are processed according to a risk-assessment method that provides for four channels. Over 85% of all import declarations are processed through the green channel. This percentage has increased since the last Review of Brazil. 
13. Brazil's 2012 applied MFN customs tariff is entirely ad valorem , with rates ranging from zero 
to 55%. The simple average MFN tariff applied in 2012 was 11.7%, up from 11.5% in 2008. Some 8% of tariff lines were duty free in 2012, about the same percentage as in 2008. The average 
applied tariff for the manufacturing sector is 12%, higher than for agriculture. Brazil bound its 
entire tariff during the Uruguay Round at rates between 0% and 55% for agricultural products (WTO definition), and from 0% to 35% for non-agricultural products. Besides customs tariffs, 
imports are subject to a number of internal taxes. The application of these taxes varies depending 
on the product type, the competent sub-federal authority, and the importer's tax regime status, thus rendering Brazil's tax system complex. WT/TPR/S/283 • Brazil 
 
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  14. Brazil maintains a system of automatic and non-automatic licences for imports of various 
products, regardless of their origin. Licences are non-transferrable and valid for 90 days. Non-automatic import licences are issued by some 16 agencies; the statutory timeframe for the processing of requests is 60 calendar days. The importation of some products may require licences 
from more than one entity. Refusals to grant a licence may be appealed before the relevant 
licensing agency. Some agencies may levy a fee for the import licence; according to the authorities, these fees reflect the cost of services rendered. Non-automatic licensing is also used in 
the administration of duty and tax concessions to benefit from such concessions, imports must 
undergo a "similarity exam", to ascertain that no equivalent domestic production exists.    
15. Brazil is a significant user of trade remedies, particularly anti-dumping (AD) measures: 
during the review period, the number of new cases va ried significantly from year to year, but with 
the exception of 2009 was above historical trends. In the first nine months of 2012, Brazil initiated 
47 new investigations, exceeding the previous record of 40 in 2010. There were 83 anti-dumping measures in place in mid-2012, up from 63 reported in the last review, for October 2008. During 
the review period Brazil took a number of step s to strengthen trade defence. These included 
implementing changes to certain practices, such  as anti-circumvention, and to the regulatory 
framework, for instance, passing new legislation providing for more stringent application of 
provisional measures.  
16. Most technical regulations enacted in Brazil are based on international standards; whenever 
this is not the case, they are based on performanc e criteria. A period of six months is typically 
allowed between the publication of the measure and its entry into force. Proposed technical 
regulations considered to have trade effects are forwarded to the WTO for Members' comments. 
The recommended period for review and revision of  technical regulations is four years. Brazil's 
sanitary and phytosanitary system is based on risk analysis that generally takes account of import 
origin and product characteristics. The conclusions of pest risk analyses are notified, as a draft for 
comments, to the pertinent authority of the country  of origin and to the WTO. The importation of 
any product subject to sanitary and phytosanitary controls requires a non-automatic licence. 
17. Brazilian law provides for the application of an  export tax of 30%, which may be decreased 
or increased to up to 150% in order to address foreign exchange or trade policy objectives. In practice, the export tax is zero-rated, except on raw hides and skins, cigarettes, and arms and ammunition. During the review period, Brazil th e rates applied on these products remained 
unchanged.  
18. Brazil maintains a policy of export promotion through a number of programmes to enhance 
the competitiveness of export-oriented companies,  in particular small-scale enterprises, and 
increase exports.  Since the last Review of Brazil, several export support programmes have been 
modified or expanded, and some new ones have be en introduced. A number of finance, insurance, 
and guarantee schemes offering attractive interest rates and other conditions are available to 
exporters. Among the main instruments are th e Export Financing Programme (PROEX) and the 
export credit schemes under the BNDES-EXIM programme. The latter are geared to promote 
exports with local value added, and the stated conditions for participation often include domestic-content/production thresholds. According to the Brazilian authorities these conditions only apply 
for securing automatic eligibility for financing.    
19. Brazil's competition legislation provides for a rule of reason approach in the consideration of 
all concentrations and anti-competitive practices. Brazil's competition regime was overhauled 
during the period under review and a new competition policy entered into force in May 2012. The 
main changes comprise a significant institutional restructuring, a switch from ex post to ex ante control of mergers and acquisitions, and amendmen ts regarding the scope of prohibited conduct 
and sanctions. In the new Law, the non-exhaustive list of potentially anti-competitive practices has 
been refined and expanded with a reference to the abusive use of intellectual property rights. The compulsory licensing of intellectual property ri ghts has been included among both the possible 
remedies for conditional clearance of mergers and the possible penalties for anti-competitive 
conduct. The existing leniency programme was strengthened. The criteria for the notification of 
mergers were also modified with the introduction of a cumulative criterion based on the Brazilian turnover of two of the merging parties in the previous year. This is expected to reduce the number 
of transactions subject to notification. Changes were also made to the basis on which fines for 
infractions of competition law are to be calculat ed; as a result, the deterrence effect of these 
sanctions may be reduced. WT/TPR/S/283 • Brazil 
 
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  20. Incentives and government assistance are available at the federal and sub-federal levels. 
Incentive programmes may be regional, aimed at developing research, or targeted at specific sectors. Specific programmes are in place for the automotive, information technology, aeronautics, and petroleum industries. The range of support measures includes: loans; tax incentives; financial 
contributions; long-term and equity financing; accelerated depreciation; guarantees; grants; and 
credit insurance. Incentives granted in the context of certain programmes promoting information technology and telecommunications are linked to Basic Productive Process (PPB) criteria, which are 
product-specific and stipulate which stages of the respective manufacturing process must be 
carried out in Brazil. 
21. Brazil maintains a policy of free-trade zones for imports and exports, by which fiscal and 
other incentives are granted to promote production in, and the development and regional 
integration of, border areas in the north region . Eight free-trade zones have been created. The 
main FTZ is the Manaus Free Trade Zone (ZFM), in the Amazon region. Companies established in the ZFM are granted tax exemptions by the fede ral and state governments. One of the main 
requirements for the concession of these benefits is observing PPB criteria; there are also a 
number of environmental and social requiremen ts. All imports to the ZFM require a licence. 
Incentives under the ZFM programme will be in force until 2023. 
22. One of the Brazilian authorities' key concerns remains the availability and cost of credit. In 
this respect, the authorities consider that their po licy of targeting credit is necessary to correct a 
market failure. To this end, Brazil maintains seve ral official credit programmes aimed at different 
sectors and types of producers. The national de velopment bank BNDES is the main institution 
providing credit or acting as a financial intermediary and guarantor. Credit takes the form of 
medium and long-term loans made available at attractive interest rates. The BNDES "equalizes" interest rates, that is, covers the difference be tween the agreed rate and the relevant market 
interest rate.   
23. Brazil is not a party to the Agreement on Government Procurement. Brazil's procurement 
system is decentralized and tendering procedures are generally used. Brazil's Tendering Law 
allows for preferences for goods and services produced in Brazil, or produced or supplied by 
Brazilian companies or by companies that invest in technology development in Brazil, in the case of equivalent offers. Small businesses may benefi t from preferential measures that may include 
quotas, preference margins of up to 10% as well as tendering procedures restricted to small 
companies. A revision to the Tendering Law introduced in 2010 significantly altered Brazil's 
procurement legislation to make the granting of  preferences a permanent feature of the regime: 
preferential margins of up to 25% may be granted for goods and services produced nationally and 
in accordance with Brazilian technical standards. 
24. Brazil's intellectual property legislation covers all the major aspects mentioned in the TRIPS 
Agreement. In some areas, including copyright, Brazil grants rights that exceed the minimum 
terms laid down in the Agreement. There have b een no substantial legislative modifications on 
intellectual property matters since 2009, except those that introduced the requirements for the 
registration of layout designs of integrated circuits and computer software. In April 2012, Brazil started a Pilot Programme of Priority Examinatio n of "Green Patents", which fast-tracks patent 
applications filed in Brazil via the Paris Conventi on for the Protection of Industrial Property by 
either residents or non-residents, with application date starting from 2 January 2011. 
Trade policy by sector 
25. Brazil's agriculture sector plays an important role in its economy, particularly as a source of 
exports and employment. During the review period, the agri-business sector played a crucial role 
in sustaining Brazil's trade surplus. Agri-food exports reached a record level of US$95.8 billion 
in 2012. Using the WTO definition of agriculture, the average MFN tariff in 2012 was 10.1%. 
Groups of products facing a tariff higher than the average include: dairy products (18.6%), sugar 
and confectionary (16.7%), beverages, spirits and tobacco (16.5%), and coffee and tea (13.7%), while imports of cotton (7.4%) oil seeds, fats an d oils and their products (7.8%), and animals and 
animal products (7.9%), are subject to tariffs lower than the average. 
26. Brazil’s level of support to its agricultural producers is relatively low compared with other 
countries, but it maintains several domestic support measures, including preferential credit lines WT/TPR/S/283 • Brazil 
 
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  and price support mechanisms. During the review period, new programmes were created to 
finance farmers, including the Medium-Scale Agricultural Producer Support Programme (PRONAMP) and the Low Carbon Agriculture Programme (Progr ama ABC). Official rural credit disbursements 
continued to rise, as well as key support programm es such as PRONAF. Brazil maintains a policy of 
mandatory bank reserve requirements to be allo cated to finance agricultural activities. Since 
November 2008, the required rate of mandatory resources has been increased twice, bringing it to 34% of demand deposits from 25%. The provision of credit at fixed interest rates is the main 
policy instrument for the support of family farming in Brazil. 
27. Brazil operates several programmes based on minimum price guarantees, which support the 
production of a wide range of commodities, including corn, rice, cotton, and wheat. These schemes account for more than half of transfers granted to farmers. Among them, the Policy of Guaranteed 
Minimum Prices (PGPM) remains an important pillar of Brazilian agricultural policy. The PGPM is 
aimed at supporting producers when market prices fall to levels deemed harmful to their income stability. The policy is implemented through two types of schemes: commercialization instruments, 
which may involve the direct purchase of products, and credit lines to finance the storage of goods 
covered by minimum price guarantees. 
28. Brazil has a highly diversified manufacturing se ctor. During the review years, however, the 
sector lost dynamism due to an erosion of competiveness, which translated into rising imports and 
slow-growing exports. Imports of manufactured products have been increasing their market share and capturing a significant part of the growth in consumption, and the manufacturing sector's 
trade balance registered a record deficit of US$81.3 billion in 2012. In an effort to reverse this 
situation, the Government has strengthened the importance given to industrial policy, partly 
through two comprehensive nationwide plans, the Productive Development Policy (2008-10) and the Plano Brasil Maior  (2011-14). The instruments used to promote the manufacturing sector 
under these plans include credit lines under favourable conditions, public procurement, fiscal 
incentives, and border measures. 
29. Under the Plano Brasil Maior,  the Government adopted significant fiscal incentives to help 
the domestic auto industry recover from the effe cts of the global crisis. Between December 2011 
and December 2012, tax breaks were offered for companies producing vehicles with more than 65% of regional content. As From 1 January 2013, the automotive sector's fiscal regime was superseded by the INOVAR-AUTO programme. Companies eligible for the programme may benefit 
from an Industrial Products Tax reduction of up to 30%. In order to qualify for the programme, 
vehicle manufacturers must comply with energy-efficiency requirements and with certain domestic manufacturing or investment conditions. 
30. Brazil's regulatory framework for oil and gas exploration and production (E&P) was amended 
in 2010 with a view to allowing for increased State participation. Exclusive rights were granted to state-controlled PETROBRAS in designated geographic blocks, and a production-sharing regime 
was introduced for strategic blocks and blocks located in the "pre-salt" polygon. Oil and gas E&P 
activities remain subject to local-content conditions. In 2009, Brazil adopted a new Gas Law introducing tendering for concessions in the downstream segment of the natural gas subsector.  
31. Brazil is nearly self-sufficient in primary en ergy production; petroleum production has been 
expanding steadily, posting a 20.5% increase from 2007 to 2011. Notwithstanding the growing 
domestic demand, Brazil became a net exporter of crude oil for the first time in 2007 and has significantly expanded its oil trade surplus since then. Nevertheless, Brazil's dependency on 
imports of refined petroleum products has increase d due to insufficient refining capacity. Brazil 
relies on substantial imports of natural gas, although domestic production increased by 41% between 2007 and 2012. PETROBRAS has maintained  its dominant position in the production, 
refining, distribution, and retail market of petr oleum and petroleum products, accounting for some 
90% of the country's total oil production and 98% of total refining capacity. Brazil remains the world's second-largest producer of ethanol. In 2012, the BNDES launched two new programmes offering credit at attractive conditions to the ethanol sector.  
32. Private-sector participation in the electricity market has been expanding through 
Government auctions and concessions, but state-owned companies still play an important role. The regulatory framework for the electricity sector was revamped in early 2013, with the passage of a 
new law, which now regulates the concessions of generation, transmission, and distribution of 
electricity. The new law extended the regime of concessions for electricity generation and the WT/TPR/S/283 • Brazil 
 
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  system of quotas, only once, for a period of up to  30 years. The extension is contingent upon the 
generator's acceptance of certain conditions, incl uding the remuneration tariffs to be applied, a 
guaranteed supply quota allocation, and quality standards. Quotas will be allocated through 
contracts.  
33. The Brazilian financial system weathered the global economic crisis well, thanks to an 
adequate policy response and built-in financial buffers. Brazil is committed to implementing Basel III gradually and, since Brazilian current capi tal requirements exceed those set by Basel III, 
its adoption is not expected to imply a significant capitalization effort for the financial system. The 
establishment of new foreign financial institutions requires approval by Presidential Decree. In practice, the establishment of new foreign financial institutions has been allowed, and 17% of assets are in the hands of foreign banks.  
34. Acknowledging that the high cost and scarce access to credits was a systemic issue of the 
Brazilian economy, the authorities have conti nued to promote an increase in the degree of 
financial intermediation and a reduction in interest rates spreads. They have promoted financial 
inclusion by, inter alia , improving distribution channels, increasing transparency, and adapting the 
regulation of financial services for low income customers. This has resulted in an increase of the degree of financial intermediation: the credit to GDP ratio rose from 25% in 2003 to more than 
50% in 2012. The role of state banks in medium- and long-term financing continues to be very 
important, directly or through interest rate equalization initiatives. The decline in interest rate spreads has played an important role in increasing financial deepening. The average interest rate spread, considering the credit portfolio as a whole, dropped by almost 10 percentage points during 
the period under review. However, although averag e interest rate spreads were lowered, at over 
24 percentage points in 2012, they remain wide.  
35. Recent changes to the telecommunications legislation have allowed telecommunication 
operators more flexibility to offer converged servic es in line with the international trend and the 
development of new technologies. The sector regu lator, ANATEL, controls the prices of fixed 
telephony services provided under a concession (public regime). It also sets interconnection prices 
for services provided under the public regime, while interconnection prices for services under the 
private regime are freely negotiated, but must be notified to ANATEL. There are no restrictions on foreign ownership in telecommunication companies. A cap on foreign investment in cable TV services was removed in 2011. In June 2012, ANATEL auctioned radio spectrum for commercial 
mobile services, requiring winning bidders to commit to purchase goods, equipment, systems, and 
data networks with national technology, and to ensure that, after five years, 50% of the equipment, telecommunications systems, and netw orks would be produced locally and 20% with 
technology developed in Brazil.  
36. Concessions for the provision of Brazilian-based  regular air transport services are granted 
only to Brazilian companies with headquarters in Brazil, managed exclusively by Brazilians, and in 
which 80% of voting rights are in Brazilian hands. Domestic public air transport services are 
reserved to Brazilian companies. During the re view period, the Brazilian Government granted 
concessions for the operation of three of the main international airports, and two more are in the process of receiving such concessions. As rega rds maritime transport, cargos of government 
entities and enterprises, and goods benefitting  from fiscal or credit programmes must be 
transported by Brazilian-flag vessels, unless a waiver  is granted on a reciprocity basis. Exports of 
crude oil extracted in Brazil must also be transported in Brazilian-flag vessels. Cabotage is 
reserved for Brazilian-flag vessels operated by Braz ilian shipping companies, unless this restriction 
is waived under certain conditions. A federal tax (AFRMM) is levied on import cargos; the resources are used to provide credits at attractive rates to Brazilian shipping companies and 
Brazilian shipbuilders. No public ports are operated under private concessions. 
 WT/TPR/S/283 • Brazil 
 
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  1  ECONOMIC ENVIRONMENT 
1.1  Overview 1.1.  During most of the review period, the Brazilian economy recorded a strong performance, with 
real GDP growth averaging 3.6% a year in 2007-12, albeit with important fluctuations. Growth was 
driven primarily by vigorous domestic demand an d favorable external conditions in the form of 
strong demand and high international prices for Brazilian commodities, which boosted the country's terms of trade. At the same time, growth was supported by sound macroeconomic 
policies, focused on achieving a primary fiscal surp lus and strict inflation targets, and a floating 
exchange rate regime, all of which contributed to consolidate macroeconomic stability. Helped by an appreciating currency, and despite strong domestic demand growth, inflation has been kept under control, within the band of fluctuation allowed by the inflation targeting-policy. 
1.2.  Sustained economic growth over almost  a decade, aided by higher minimum wages and 
social programmes, allowed Brazil to make important progress towards reducing poverty and income inequality, while employment figures improved. Nevertheless, between the second half 
of 2011 and mid-2012, growth decelerated significan tly. The loss of dynamism can be attributed 
partly to the appreciation of the Brazilian curre ncy and the global economic slowdown, both of 
which resulted in reduced demand for Brazilian exports. But it also reflects long-standing structural 
problems affecting the Brazilian economy's competit iveness (inadequate infrastructure, a very high 
tax burden, highly regulated labour markets, an d overall relatively high production costs). 
1.3.  In a bid to boost competitiveness, the Government adopted measures aimed at removing 
infrastructure bottlenecks through concessions and private-public sector partnerships, lowered 
energy charges, and reduced the tax burden on certain manufacturing industries. However, to 
support sectors affected by a loss of competitiveness, the Government also took measures that may have an impact on trade, including increasing tariffs temporarily, using preferential margins 
for domestic goods and services in government pr ocurement, and increasing export credits. In 
mid-2011 the Central Bank initiated an easing monetary cycle that lowered the policy interest rate (SELIC) to record-low levels by Brazilian standa rds, aided by the disinflationary scenario in the 
global economy. Also, the rate and scope of the Financial Transaction Tax (IOF) was modified on 
several occasions to help smoothen capital flows. On the fiscal side, the Government was able to provide fiscal stimulus while maintaining a primary surplus throughout the review period.  
1.4.  Brazil's exports increased at an averag e rate of 8.6% between 2007 and 2012, reflecting 
strong external demand for its commodities. Howeve r, import growth outpaced exports, expanding 
at an annual rate of 13.1% between 2007 and 2012  and causing the trade surplus to shrink. While 
Brazil strengthened its position as a net exporter of agricultural and mining products during the 
period, its trade deficit in the manufacturing sector increased sharply, with imports of 
manufactured products growing at an average annu al rate of 16.2%, and accounting for 73.1% of 
total imports in 2012. Brazil's structural deficit in the services trade balance also widened during 
the review period, largely on account of higher pa yments for leasing capital equipment, travel and 
transportation. After years of consecutive surpluses,  Brazil's current account plunged into a deficit 
in 2008; the deficit has persisted, and was at around 2.4% of GDP in 2012. However, large capital inflows, especially foreign direct investment (FDI), have more than offset the current account 
deficit. In mid-2012, Brazil was the world's sixth largest recipient of FDI. The review period was 
marked by a strengthening of Brazilian trade ties with Asia, in particular with China. Nevertheless, the European Union remained Brazil's major trade partner, as both an export destination and a 
source of imports.  
1.2  Output and Employment 1.5.  The Brazilian economy continued to grow rapidly in 2007-11, at an annual average rate 
of 4.2% (Table 1.1). However, growth was slower than during Brazil's previous review period and 
was marked by strong fluctuations. In 2009, the glob al economic crisis led Brazil's GDP to decline 
by 0.3%, interrupting a long period of sustained growth. The economy recovered substantially in 2010, thanks partly to a mix of macroeconomic policies combining credit expansion and fiscal 
incentives. Growth has nevertheless slowed down significantly since 2011; in 2012, real GDP 
growth was only 0.9%, bringing the average growth for 2007-12 to 3.6%. WT/TPR/S/283 • Brazil 
 
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  1.6.  Brazil became the world's sixth largest economy in 2011 in terms of nominal GDP, which 
reached US$2,475 billion; GDP per capita was at US$12,696 (Table 1.1), but declined somewhat in 2012, to US$11,462. According to the World Bank's Atlas method, Brazil's Gross National Income (GNI) per capita, in terms of purchasing power parity, rose to US$11,500 in 2011 (an 
increase of 20% with respect to 2007), ranking it as an upper-middle income country.
1 Brazil's 
growth strategy has been accompanied by policie s aimed at improving income distribution, which 
have resulted in significant improvements; poverty has been reduced and inequality levels (as 
measured by the Gini Index) dropped to a 50-year low of 0.519 in 2011.2 Nonetheless, its social 
indicators remain relatively low; Brazil has a Human Development Index of 0.718, which is below the regional average for Latin America and the Caribbean (0.731).
3 According to the World Bank, 
10.8% of the Brazilian population still lived on less than US$2 a day (at 2005 international prices) 
in 2009.4 Addressing deficiencies in the educational system remains a significant challenge for 
improving Brazil's development indicators and economic competitiveness.5  
Table 1.1 Basic economic indicators, 2007-12 
 2007  2008  2009  2010 2011 2012  
              
Gross domestic product (GDP)       
   Current GDP (R$ billion) 2,661  3,032  3,239  3,770 4,143 4,403  
   Current GDP (US$ billion) 1,367  1,651  1,626  2,144 2,475 2,253  
   GDP per capita (US$) 7,283  8,707  8,490  11,094 12,696 11,462  
   Real GDP, growth rate (%) 6.1 5.2 -0.3 7.5 2.7 0.9 
   By type of expenditure (as percentage of current GDP)       
      Total consumption 80.2 79.1 82.3 80.8 81.0 83.8 
         Private consumption 59.9  58.9 61.1 59.6 60.3 62.3  
         Public consumption 20.3 20.2 21.2 21.1 20.7 21.5 
      Gross fixed capital formation 17.4  19.1 18.1 19.5 19.3 18.1  
      Variation in inventory 0.9 1.6 -0.2 0.8 0.4 0.5 
      Exports of goods and services 13.4  13.7 11.0 10.9 11.9 12.6  
      Imports of goods and services 11.8 13.5 11.1 11.9 12.6 14.0 
   By type of expenditure (percentage gr owth, based on GDP at constant 1995 prices)    
      Total consumption 5.8 5.1 4.1 6.3 3.6 3.1 
         Private consumption 6.1  5.7 4.4 6.9 4.1 3.1  
         Public consumption 5.1 3.2 3.1 4.2 1.9 3.2 
      Gross fixed capital formation 13.9  13.6 -6.7 21.3 4.7 -4.0  
      Exports of goods and services 6.2 0.5 -9.1 11.5 4.5 0.5 
      Imports of goods and services 19.9  15.4 -7.6 35.8 9.7 0.2  
   By sector of economic activity (% of current GDP)        
      Agriculture 4.8  5.0 4.9 4.5 4.7 4.5  
      Industry 23.9 23.7 23.1 24.0 23.5 22.3 
         Mining and quarrying 2.0  2.8 1.6 2.5 3.5 3.6  
         Transformation 14.6 14.2 14.4 13.9 12.4 11.3 
         Construction 4.2  4.2 4.5 4.8 4.9 4.8  
         Electricity, gas, water, sewage and urban cleaning  3.1 2.7 2.7 2.8 2.6 2.6 
      Services 57.3  56.3 58.3 57.0 57.1 58.2  
         Distributive trade 10.4 10.7 10.8 10.7 10.8 10.8 
         Transportation, storage,  and courie r 4.1  4.3 4.1 4.3 4.4 4.5  
         Information services 3.3 3.2 3.1 2.8 2.6 2.4 
         Financial intermediation and insurance 6.6  5.8 6.2 6.4 6.3 6.0  
         Other services 12.2 12.0 12.7 12.3 12.4 13.2 
         Real estate services 7.3  6.9 7.2 6.7 6.7 6.9  
         Public administration, education, and public health  13.3 13.4 14.1 13.9 13.9 14.4 
      Tax 14.0  14.9 13.7 14.4 14.8 15.0  
Other economic indicators (% of current GDP)        
   Gross national savings 18.4  19.0 16.3 18.0 18.5 14.8  
      Private secto r 15.2 17.6 17.1 18.7 18.8 .. 
      Public secto r 3.2  1.4 -0.8 -0.7 -0.3 ..  
   Gross domestic investment  18.3 20.7 17.8 20.2 20.6 17.6 
      Private secto r 16.6  18.5 15.7 17.9 .. ..  
      Public secto r 1.7 2.2 2.1 2.3 .. .. 
Employment       
   Level of activity (2002=100)a 122.1  126.9  117.7  128.0 128.9 123.1  
   Urban unemployment rate (%, annual)b 9.3 7.9 8.1 6.7 6.0 5.5  
                                               
1 World Bank online information. Viewed at: http ://data.worldbank.org/indicator/NY.GNP.PCAP.PP.CD. 
2 World Bank online information. Viewed at: http ://www.worldbank.org/en/country/brazil/overview. 
3 UNDP online information. View ed at: http://hdrstats.undp.org/en/countries/profiles/BRA.html. 
4 World Bank online information. Viewed at: http://data.worldbank.org/indicator/SI.POV.2DAY/ 
countries/BR?display=graph. 
5 WEF (2012). WT/TPR/S/283 • Brazil 
 
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   2007  2008  2009  2010 2011 2012  
   Structure of national employ ment (% of occupied population)       
      Agriculture 18.3  16.7 17.1 .. 15.7 ..  
      Industry 15.3 16.2 14.7 .. 13.4 .. 
         Industry of transformation activities 14.4  15.4 13.8 .. 12.6 ..  
         Other industrial activities  0.8 0.8 0.9 .. 0.8 .. 
      Construction 6.7  7.4 7.4 .. 8.4 ..  
      Services 52.2 51.4 52.9 .. 53.7 .. 
         Wholesale trade and reparation 18.0  17.3 17.7 .. 17.8 ..  
         Accommodation and alimentation supply 3.7 3.8 3.9 .. 4.9 .. 
         Transport and communication 4.8  5.1 4.8 .. 5.5 ..  
         Public administration 5.0 4.5 5.1 .. 5.4 .. 
         Education, health and social services 9.2  9.2 9.4 .. 9.2 ..  
         Domestic services 7.4 7.1 7.8 .. 7.1 .. 
         Other collective, social and personal services  4.1 4.4 4.2 .. 3.8 ..  
      Other activities 7.5 8.3 7.9 .. 8.8 .. 
Pro memoria       
Industrial production (% change) 6.0  3.1 -7.4 10.5 0.4 -2.6  
Overall real wage in the manufacturing industry (2002=100)c 127.1  133.7  132.2  139.5 142.2 139.3a 
Economically active population* / Occupied population**  (million)  97.9*  99.5*  101.1*/  
92.7** .. 100.73/ 
93.5** .. 
Population (million) 187.6  189.6  191.5  193.3 194.9 196.5  
.. Not available. 
a The level of activity indicator mainly comprises the level of capacity utilization, the number of hours 
worked in production by employee, and the real in dustrial sales on the reference and on the prior 
month. 
b The unemployment rate covers th e metropolitan regions of Recife, Salvador, Belo Horizonte, Rio de 
Janeiro, São Paulo, and Porto Alegre. 
c Deflated by IPC-Fipe for São Paulo and by INPC  for CNI (National Confederation of Industry). 
Source: Central Bank of Br azil; IBGE; and IMF (2012), Brazil 2012 Article IV Consultation - Staff Report,  
Country Report No. 12/191.  Viewed at:  http://www.imf.org/external/pubs/ft/scr/2012/ cr12191.pdf. 
1.7.  Private consumption remained strong throughout the review period, despite the economic 
crisis. It grew faster than GDP, thanks to higher real wages, an increase in the working population, 
a decline in unemployment, and facilitated access to credit. Brazil maintains a policy of increasing minimum wage requirements periodically, with a view to raising household income, reducing 
inequality, and boosting domestic demand.
6 This raised the minimum wage by 21.7% in real terms 
during 2007-12.7 Supported by falling interest rates, credit has continued to expand at a strong 
pace, reaching 52.6% of GDP in November 2012, although this level remains low by international 
standards. Consumer credit has grown particularly fast, accounting for 46% of total credit. 
However, this has led to a high accumulation of  debt in the household sector, at over 40% of 
disposable income.8  
1.8.  Gross national savings accounted for 18.5% of GDP in 2011, but declined to 14.8% in 2012 
(Table 1.1). The significant growth of private sector savings in 2007-11 was offset by a fall in 
public sector savings, which have shown negative levels since 2009. Brazil's relatively low national 
savings is reflected in its investment figures,  which remain modest when compared to other 
emerging economies. As of 2012, gross domestic investment accounted for 17.6% of GDP, with 
the private sector contributing most of it. As highlighted by the IMF, a key policy challenge facing Brazil is rebalancing domestic demand from consumption to savings and investment to foster 
growth and external stability.
9  
1.9.  Despite the fluctuations in the economy during the review period, employment figures 
improved. The unemployment rate for the six main  metropolitan regions fell to 5.5% in 2012, 
down from 9% in 2007, although this does not pr ovide a comprehensive picture, since rural areas 
and the poorest urban areas of the country are ex cluded from the measurement (Table 1.1). Data 
from the PNAD ( Pesquisa Nacional por Amostra de Domicílios ), the biennial survey conducted by 
the national statistical bureau IBGE, points to a decline in unemployment at the national level, 
from 8.2% in 2009 to 6.7% in 2011.10 Thanks to a more inclusive growth pattern and a number of 
                                               
6 Law No. 12,282/11 defines the parameters for re al minimum wage gains for 2011-15. 
7 Ministry of Finance (2012); and information provided by the Brazilian authorities. 
8 IMF (2012a).   
9 IMF (2012b). 
10 IBGE online information. View ed at: http://www.ibge.gov.br/home /presidencia/not icias/noticia_ 
visualiza.php?id_noticia=2222&id_pagina=1. WT/TPR/S/283 • Brazil 
 
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  policy interventions, Brazil has made progress in the formalization of its labour force; the number 
of formal jobs increased by 4.5% in 2008-09, even as the crisis hit.11 Nevertheless, improvements 
in the labour market have not been accompanied by major gains in productivity, which increased at an average of just 0.9% a year in 2000-09. Some sectors even experienced declines, such as 
manufacturing, where productivity fell by an av erage of 0.9% a year in the same period.
12 
1.10.  Brazilian imports and exports of goods an d services grew at annual average rates of 14% 
and 8.9%, respectively, during 2007-12. Although  exports and imports of goods and services 
decreased in 2009, reflecting a general decline in global trade, they recovered substantially 
in 2010 (Table 1.1). Since 2009, imports of goods and services have made up an increasingly larger share of GDP than exports. Imports in the manufacturing sector have increased particularly 
strongly in recent years (section 1.7).  
1.11.  Changes in the sectoral composition of the Brazilian economy were marked by a decrease in 
the share of the manufacturing (transformation) sector in total GDP, which fell 3.3 percentage points between 2007 and 2012 to 11.3% (Table 1.1). The industrial sector as a whole accounts for 
22.3% of GDP. The contribution of agriculture has decreased to 4.5% of GDP. Services continue to 
be the largest sector, accounting for 58.2% of total GDP.  
1.12.  Despite its good performance during most of the review period and strong resilience to the 
global economic crisis, the Brazilian economy faces a number of structural issues that would need 
to be addressed to sustain higher growth levels. Import constraints in some sectors, in particular manufacturing, have led to losses in competiveness both domestically and abroad. Needed reforms include improving Brazil's tax regime, increasing th e efficiency of public spending, reducing further 
the cost of credit, deepening trade liberalization,  and addressing the several barriers that affect 
the competiveness of the Brazilian economy (section 1.6).  
1.3  Fiscal Policy 
1.13.  Brazil's fiscal policy has its basis in the Fiscal Responsibility Law of 2000, which establishes 
rules for fiscal management applicable to all levels of Government.
13 Over the past decade, the 
Government has made important progress in achieving fiscal consolidation, which remains one of 
the pillars of its economic policy. During the period under review, Brazil continued to post primary 
surpluses at all government levels and to reduce its net public debt. However, there remains a need for further reforms to improve the effici ency of public spending and the tax system. 
1.14.  The Government pursues fiscal discipline by setting annual targets for the primary surplus 
at all government levels. During the review peri od, the Government set primary surplus targets for 
the consolidated non-financial public sector at an average of 3% of GDP, lower than those set in 2003-07 (averaging 4.25% of GDP).
14 These surpluses are considered to be consistent with a 
decreasing net debt/GDP ratio. The target for 2012 was set at R$139.8 billion, equivalent to 
approximately 3.1% of GDP. However, in November 2012 the Government announced that it would not meet the annual target, due to lower revenues and tax reductions, and it would hence 
use the option of deducting from the full targ et the expenses for the Growth Acceleration 
Programme (PAC); it added that the decrease in the primary surplus would not exceed R$42 billion, and that public debt would continue to fall.
15 The lower primary surplus targets set in 
recent years have been associated with the need to grant tax breaks to help stimulate the 
economy.  
1.15.  As a result of economic growth and improvements in tax collection, Central Government 
total revenue increased by 71.6% in nominal terms during 2007-12, reaching an all-time high of 
almost R$1.1 trillion in 2012. As a share of GDP, however, it increased from 23.3% in 2007 
                                               
11 OECD (2011). 
12 IPEA (2012). 
13 Supplementary Law No. 101 of 4 May 2000. 
14 WTO (2009). 
15 Agencia Brasil online information. Viewed at: http://agenciabrasil.ebc.com.br/noticia/2012-11-06/ 
governo-nao-deve-cumprir-meta-cheia-do-s uperavit-primario-admite-mantega.   WT/TPR/S/283 • Brazil 
 
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  to 24.1% in 2012 (Table 1.2). In 2009, the Central Government lost 4.1% (in nominal terms) in 
tax revenues, due to slower economic activity and the adoption of tax breaks for some sectors.16  
Table 1.2 Public sector fiscal balance, 2007-12 
(Percentage of GDP, unless otherwise specified) 
 2007  2008  2009  2010 2011 2012  
A.  Central Government       
Total revenue 23.3 23.6 22.8 24.4 23.9 24.1 
   Treasury revenue 17.9  18.2 17.1 18.7 17.9 17.8  
         Gross revenue 18.4 18.6 17.6 19.1 18.3 18.2 
          - Taxes 8.1  8.9 8.0 7.9 8.6 8.5  
              Income tax (IR) 6.0 6.3 5.9 5.5 6.0 6.0 
              Tax on Industrial Products (IPI) 1.3  1.3 0.9 1.1 1.1 1.0  
              Financial Transaction Tax (IOF) 0.3 0.7 0.6 0.7 0.8 0.7 
              Import tax (II) 0.5  0.6 0.5 0.6 0.6 0.7  
             Othe r 0.0 0.0 0.0 0.0 0.0 0.0 
          - Social contributions  8.2 7.1 6.6 6.6 6.9 6.9  
             Contribution to Social Security Financing (COFINS)  3.9 4.0 3.6 3.7 3.8 4.0 
             Other contributions (CSLL, PIS/Pasep) 2.3  2.5 2.3 2.3 2.4 2.4  
         - Other revenue 2.2 2.6 3.1 4.6 2.8 2.8 
         Restitutions -0.5  -0.4 -0.5 -0.4 -0.4 -0.4  
         Fiscal incentives 0.0 0.0 0.0 0.0 0.0 0.0 
   Social security revenue 5.3  5.4 5.6 5.6 5.9 6.3  
   Central bank revenue 0.0 0.1 0.1 0.1 0.1 0.1 
Transfers to states and municipalities 4.0  4.4 3.9 3.7 4.2 4.1  
Total net revenue 19.3 19.2 18.9 20.7 19.7 20.0 
Total expenditure 17.1  16.4 17.7 18.6 17.5 18.2  
   Payroll 4.4 4.3 4.7 4.4 4.3 4.2 
   Social security benefit 7.0  6.6 6.9 6.8 6.8 7.2  
   Current and capital expenditures 5.7 5.4 5.9 7.3 6.2 6.7 
         Workers' Assistance Fund (FAT) 0.7  0.7 0.8 0.8 0.8 0.9  
         Economic subsidies and grantsa 0.4 0.2 0.2 0.2 0.3 0.3 
         Assistance benefits (LOAS/RMV)b 0.5 0.5 0.6 0.6 0.6 0.7  
         Petrobras capitalization  0.0 0.0 0.0 1.1 0.0 0.0 
         Other current and capital expenditures 4.1  4.0 4.3 4.5 4.5 4.9  
   Transfers from treasury to central ban k 0.0 0.0 0.0 0.0 0.1 0.1 
   Central bank expenditures 0.1  0.1 0.1 0.1 0.1 0.1  
Central Government primary balance 2.2 2.4 1.3 2.1 2.2 2.0 
Nominal interest -4.5  -3.2 -4.6 -3.3 -4.4 -3.3  
Central government overall balance -2.2 -0.8 -3.3 -1.2 -2.1 -1.4 
B.  General Government       
General Government primary balancec 3.4 3.4 2.0 2.7 3.1 2.5 
General Government overall balancec -2.3 -2.4 -3.3 -2.9 -3.1 -3.0  
C. Consolidated public sector       
Consolidated public sector primary balance (including public 
enterprises) 3.3 3.4 2.0 2.7 3.1 2.0  
Consolidated public sector ove rall balance (including public 
enterprises) -2.8 -2.0 -3.3 -2.5 -2.6 -2.5 
Memorandum items       
Gross general government debt (R$ billion) 1,543  1,741  1,973  2,012 2,244 2,583  
Gross general government debt (% of GDP) 58.0  57.4 60.9 53.4 54.2 58.6  
Net public debt (% of GDP) 43.2 38.5 42.1 39.1 36.4 35.1 
Net general government debt (% of GDP) 44.4  38.8 42.5 39.7 37.1 35.8  
Net Bacen debt (% of GDP) 0.3 -1.1 -1.2 -1.2 -1.3 -1.4 
a Includes outlays on grants to regional funds an d, as of 2005, spending on the restructuring of 
liabilities. 
b Organic Social Assistance Law (L OAS) and Lifetime Monthly Income  (RMV) are assistance payments 
paid by the Central Government. 
c Does not include the operations of the Central Bank or state-owned enterprises. 
Source: Central Bank of Brazil and Treasury of Brazil. 
1.16.  In the face of falling tax revenues and the need to provide fiscal stimulus to counter the 
economic crisis, the consolidated public sector's primary surplus fell to 2% of GDP in 2009, from 
3.4% in 2008. The surplus has increased in recent years, but figures remain lower than in 2003-08. Nonetheless, the surpluses posted during the review period allowed a substantial 
reduction in the net public debt GDP ratio, which fell from 43.2% in 2007 to 35.1% in 2012 
(Table 1.2). 
1.17.  The Central Government's total expenditure increased to 18.2% of GDP during the review 
period. Social security benefits and the payroll represented 7.2% and 4.2% of GDP, respectively. 
                                               
16 Central Bank of Brazil online information.  Viewed at: http://www.bcb.gov.br/?INDECO. WT/TPR/S/283 • Brazil 
 
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  At the same time, investments by the Central Government accounted for only 1.4% of GDP 
in 2012.17 According to the IMF, Brazil could impr ove the structure of public spending by 
continuing with pension reform and reducing budg et rigidities, which would open fiscal space for 
increased investments.18 In the context of this Review, the authorities noted that, in this respect, 
it is important to take into account the reform in the pension system of federal public servants 
enacted by Law No. 12,618/12. 
1.18.  After payment of interest on its public debt, Brazil traditionally posts a deficit in its overall 
public sector balance. This deficit increased to 3.3% of GDP in 2009, but fell to 2.6% in 2011 and 
to 2.5% in 2012. The Central Government is responsi ble for a significant part of this figure, with a 
deficit of 2.1% of GDP in 2011, and 1.4% of GDP in 2012.  Public enterprises generally post an overall surplus, which helps counter the ge neral Government's traditional deficit. 
1.19.  As underlined in Brazil's last Review, the authorities consider tax reform a priority and have 
acknowledged a number of points for improvement,  including: reducing compliance costs and tax 
complexity; improving tax neutrality; eliminating distortions and fiscal competition among states; 
abolishing cumulative taxes; unifying the levels of different states' valued-added taxation (Tax on 
the Circulation of Goods and Services (ICMS)); an d reducing excessive taxation on payrolls.  
1.20.  The Government has taken steps to address some tax reform issues in recent years. 
In 2011, it reduced taxation on payroll for some sectors by replacing a social security charge 
levied on payroll by a lower charge applied to corporate revenues.
19 It has also announced that 
from 2013, the valued-added tax on imported goods applied at the interstate level will be harmonized nationally and reduced to 4%, down from a 7-12% range depending on the State of 
destination (Chapter 3.2.4).
20 Nevertheless, more comprehensive reforms are needed to 
streamline Brazil's highly complex tax system, which remains an important barrier to Brazilian firms' competitiveness (section 1.6). 
1.21.  Fiscal policy has been used as an instrument  to assist sectors affected by competition from 
imports and the global economic crisis. During the review period, Brazil granted reductions of the 
Tax on Industrial Products (IPI) on a wide range of products, including automobiles, domestic 
appliances, and capital goods. The Government announced the extension of some IPI reductions 
until December 2012
21, as well as the creation of a new fiscal regime for the automotive sector 
(INOVAR-AUTO), for the period January 2013 to December 2017 (Chapter 4.3).22 
1.4  Monetary and Exchange Rate Policy 
1.22.  Responsibility for the formulation and cond uct of monetary policy lies with the National 
Monetary Council (CMN), which sets the inflation target and the monetary policy goal, and is responsible for coordinating monetary and fiscal po licies. The Central Bank of Brazil (BCB), an 
autonomous federal institution under the organizational chart of the Ministry of Finance, is in 
charge of monetary policy implementation, executing CMN policies by publishing its Resolutions.  
1.23.  The BCB's Monetary Policy Committee (COPOM), created in 1996, is responsible for setting 
the stance of monetary policy, and establishing the target interest rate for the overnight inter-
bank loans collateralized by government bonds ( Sistema Especial de Liquidação e Custódia  or 
SELIC), the BCB's principal monetary policy instrument.
23 The COPOM's monetary policy decisions 
have as their main objective the achievemen t of the inflation targets set by the CMN.24 After each 
                                               
17 Ministry of Finance (2012); and information provided by the Brazilian authorities. 
18 IMF (2012a). 
19 Sectors affected by these tax change include text iles, shipping, buses, capi tal goods, and electric 
materials (Ministry of Finance online informatio n. Viewed at: http://www.fazenda.gov.br/portugues/ 
documentos/2012/cartilhadesoneracao.pdf). 
20 Federal Senate Resolution 13 of 26 April 2012. 
21 Federal Government online info rmation. Viewed at: http://www2.p lanalto.gov.br/imprensa/noticias-
de-governo/governo-prorroga-reducao-do-ipi-para-movei s-material-de-construcao-linha-branca-e-automoveis. 
22 Decree No. 7.819 of 3 October 2012. 
23 The COPOM is composed of the members of the Central Bank's Board of Directors.  The Governor of 
the BCB holds the deciding vote when the COPOM is  evenly split on a monetary policy decision. 
24 If inflation breaches the target set by the CMN, th e Governor of the Central Ba nk is required to write 
an open letter to the Minister of Finance explaining the reasons the target was missed, as well as the measures WT/TPR/S/283 • Brazil 
 
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  meeting of the COPOM, a decision is annouced with respect to the SELIC target rate, which is fixed 
for the period between regular COPOM meetings, an d/or the monetary bias (decision to ease or 
tighten the monetary stance); the BCB's Governor may alter the SELIC interest rate target in the direction of the bias at any time between regular COPOM meetings. To keep the SELIC rate at or 
around its target, the BCB conducts liquidity management operations in the domestic money 
market. At the end of each quarter (March, J une, September, December), the COPOM publishes 
the Central Bank's Inflation Report, which provides detailed information on economic conditions, as 
well as the COPOM's inflation projections from its most recent meeting. 
1.24.  Brazil continues to implement an inflation-targeting framework for monetary policy.  Under 
this framework, established by Decree No. 3,088 of 21 June 1999, annual inflation targets for the 
Broad Consumer Price Index (IPCA) are set by the CMN and announced by the Minister of Finance. 
The targets are set more than a year in advance, in order to help influence inflationary 
expectations. In this respect, the target for 2013 was set by Resolution No.
 3,991 of 30 June 2011, 
and the target for 2014 by Resolution No. 4,095 of 28 June 2012.25 Monetary policy decisions are 
based on future inflation forecasts, conditional on alternative interest rate paths, and taking into 
account the state of the economy and the probable  future development of exogenous variables. 
1.25.  During the period under review, monetary policy was used actively, mainly through changes 
in the SELIC target rate (see below). An initial period of tight monetary policy, in early 2008, was 
followed by a subsequent loosening in the wake of the global financial crisis and a new tightening in 2010. Since 2011, and in particular in 2012, monetary policy has had an expansionary bias as the risks of a resurgence of inflationary pressu res are considered low. Throughout the review 
period IPCA annual inflation targets and the tolerance intervals remained stable, at 4.5% 
+/-2 percentage points. Inflation targets, including their limits of variation were met in every year of the 2007-12 period.  
1.26.  Annual average changes of the IPCA were  in the 4.6-6.5% range between 2008 and 2012. 
Inflation declined between 2008 and 2009, then increased until 2011, triggered partly by strong domestic demand, higher food and oil prices, and de spite the positive effects of the appreciation of 
the real. Annual IPCA inflation reached 6.5% in 2011, the highest in the period (Table 1.3). 
In 2012, the IPCA increase slowed down to 5.8%.  
1.27.  After being increased in 2008, the target SELIC rate was lowered sharply in 2009, and the 
average rate for the year was 10.1%. The SELIC rate rose in 2010, but remained below pre-crisis 
levels. A policy of monetary easing was put in place again in 2011 and 2012, which led to a sharp 
reduction in the SELIC rate, to an average of 8.5% for 2012: the SELIC rate was lowered seven times during 2012: by the end of the year, the SELIC target rate had fallen to 7.25%. All in all, 
SELIC levels during the period under review were  considerably below those reported in Brazil's 
previous Review.  
1.28.  During the review period, broad money de finition M3 expanded faster than nominal GDP 
(Table 1.3). The share of M3 in GDP rose from 67.6% in December 2010, to 79.7% in 2012; while 
the share of expanded money M4 rose from 80.6% to 93% of GDP.
26  
1.29.  Although policy interest rates were lowered considerably during the period under review, 
lending rates remained high by international standards as did spreads. The average interest rate 
spread was a whopping 27.4% in 2011, and, although it fell in 2012, it remained high at 21.1% 
in December and 24.3% as average for the year. The spread for corporations, at 13.7% in December 2012 was considerably lower than for individuals (27.4%). High spreads may indicate 
rigidities and insufficient productivity in the bank ing sector (Chapter 4.5.1). In the context of this 
Review, the authorities indicated that although spreads remain high, there has been progress on 
the de-indexation of the economy, especially on the elimination in 2012 of a fixed minimum 
interest rate on savings (caderneta de poupança) ; this resulted in a reduction of the interest rates 
charged by banks and an increase in the supply of credit.   
                                                                                                                                               
required to bring inflation back to the target, and the time period over which these measures are expected to 
take effect (Central Bank of Brazil, 2012b). 
25 Central Bank of Brazil (2012a). 
26 Banco Central do Brasil online information. View ed at: http://www.bcb.gov.br/pec/Indeco/Ingl/ie2-
19i.xls. WT/TPR/S/283 • Brazil 
 
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  Table 1.3 Main monetary indicators, 2007-12 
 2007  2008  2009  2010 2011 2012  
              
Money       
Monetary base (12-month rate of change) 21.1 0.6 12.6 24.6 3.6 8.9 
M1 (12-month rate of change) 32.7 -3.5 12.0 12.6 1.2 13.7 
M3 (12-month rate of change) 17.4 18.0 15.6 15.5 18.8 15.9 
Interest rates       
Average lending rate (annual average) 36.7 39.6 37.3 34.9 38.7 32.5 
Interest rate spread (annual av erage) 25.3 26.6 29.2 24.1 27.4 24.3 
CDI rate (certificate of deposit) 11.1 13.5 8.6 10.6 10.9 6.9 
SELIC rate (end of period) 11.2 13.7 8.7 10.7 10.9 7.2 
Long term interest rate TJLP (fixed for 90 days) 6.3 6.3 6.0 6.0 6.0 5.5 
Inflation       
Inflation target 4.5 4.5 4.5 4.5 4.5 4.5a 
Consumer price index (IPCA) (period average, % change) 3.6 5.7 4.9 5.0 6.6 5.4 
Consumer price index (IPCA) (end of period, % change) 4.5 5.9 4.3 5.9 6.5 5.8 
Wholesale price index (end of period, %) (= IPA-DI) 9.4 9.8 -4.1 13.9 4.1 9.1 
General market price index (end of period, %) (= IGP-DI) 7.9 9.1 -1.4 11.3 5.0 8.1 
Exchange rates       
Exchange rate (R$ per US$, period average)b 1.95 1.83 2.00 1.76 1.67 1.95 
Nominal effective exchange rate (IMF index, % change)b 8.0 4.3 -3.6 12.0 1.9 -11.0c 
Real effective exchange ra te (IMF index, % change)b 8.3 5.4 0.3 14.4 4.8 -9.0c 
Terms of trade (annual % change ) 2.1 3.5 -3.2 17 7.8 -5.8 
.. Not available. 
a Inflation target for the year 2012. 
b IMF, International Financial Statistics (IFS) e-Library data, consulted on 27 February 2013. c Data for January - September 2012 only. Percentage change based on the same period of the 
previous year. 
Source: Central Bank of Br azil; IBGE; and IMF (2012), Brazil 2012 Article IV Consultation - Staff Report,  
Country Report No. 12/191. Viewed at: http://www.imf.org/external/pubs/ft/scr/2012/ cr12191.pdf.  
1.30.  Brazil has maintained a floating exchange rate regime since 1999. As a result of the effects 
of the financial crisis of 2008, and despite strong  macroeconomic and financial indicators, the real 
depreciated in nominal terms with respect to the dollar and other major currencies in late 2008. To deal with the crisis, the Government adopted a number of measures to increase liquidity in the 
domestic financial system, including: auctions of U.S. dollars (mainly to finance exporters affected 
by the credit crunch), and the re duction of reserve requirements.
27 In the aftermath of the crisis, 
the real started to appreciate vis-à-vis  the U.S. dollar, particularly between 2009 and 2011, when 
it appreciated by some 20% in nominal term s (Table 1.3). The exchange rate weakened 
substantially in 2012, but remained above the average 2004 ‒08 level.28 The real depreciated by 
some 15% against the dollar in 2012. However, in the IMF Staff Report for the 2012 Article IV Consultation, the authorities agreed that the currency remained on the strong side, 
notwithstanding the recent depreciation. The real has been propped up by strong capital inflows.
29 
1.31.  Throughout the period under review, Brazil undertook measures to smoothen capital 
inflows. This was done through the adjustment of the rate of the Financial Transaction Tax (IOF). 
This tax, on capital entering Brazil for investment in equity and debt securities, was introduced at 
the rate of 2% by Decree No. 6,983 of 20 October 2009. The IOF has been used by the 
Government to reduce the volatility, and to correct imbalances in the foreign exchange market. The IOF on foreign investment on local bonds wa s increased on two occasions in 2010, to 4% and 
6%, respectively; the rate on equities remained at 2%, although in December 2011 it was lowered 
to zero.
30 In March 2011, all foreign borrowing by Braz ilian companies with an average maturity of 
up to 360 days was subject to the 6% IOF; the time -limit was raised to two years in April 2011, to 
three years in March 2012, and to five years later the same month.31 Decrees No. 7,751 
                                               
27 Provisional Measure No. 443 of 21 October 2008, granted the Banco do Brasil and the Caixa 
Econômica Federal (CEF), the two largest Brazilian state-owned financial institutions, the right to acquire shares of any financial institution, including insurance companies, with liquidity problems. 
28 IMF (2012b). 
29 IMF (2012b). 
30 Decrees No. 7,323 of 5 October 2010; No. 7,330 of 19 October 2010; and No. 7,632 of 
1 December 2011, respectively. 
31 Decrees No. 7,456 of 29 March 2011; No. 7,457 of 7 April 2011; No. 7,683 of 1 March 2012; and 
No. 7,698 of 12 March 2012, respectively. WT/TPR/S/283 • Brazil 
 
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  of 14 June 2012, and No. 7,853 of 4 December 2012 lowered the period to two and one year, 
respectively.  
1.32.  Brazil has proposed dealing with th e issue of currency misalignment in the WTO. 
In November 2012, Brazil submitted to the WT O Working Group on Trade, Debt and Finance a 
conceptual note on the Relationship between Exch ange Rates and International Trade and the role 
of the WTO on the issue. In the note, Brazil re affirmed its view that, "whatever the causes of 
exchange rate misalignments, the WTO should look into ways to address their effects in a systemic 
manner".32 
1.5  Balance of Payments 1.33.  The Brazilian current account plunged into a deficit of 1.7% of GDP in 2008, marking the 
end of five consecutive years of surpluses (Tab le 1.4). The deficit widened to 2.4% of GDP 
in 2012, reaching US$54.2 billion. The deterioration of Brazil's current account reflects a sharp 
increase in imports of goods and services, which gr ew faster than exports in 2007-11, as well as a 
highly negative income balance. In 2012, both expo rts and imports declined, but the fall in exports 
was sharper. 
1.34.  Brazil has a long-standing deficit in its services balance, which increased by 211% 
in 2007-12. It also posts a traditional deficit in the income balance, which reached a 
US$47.3 billion peak in 2011, a 61% increase from 2007 levels, before declining to US$33.5 billion 
in 2012. This growing income deficit is due partly to increasing profit remittances by foreign companies, which totalled US$38.2 billio n in 2011, up from US$22.4 billion in 2007.
33 Interest 
payments on Brazil's public debt also contribute to the deficit. 
1.35.  The effect of Brazil's current account deficit on its balance of payments has been to some 
extent offset by improvements in its financial account. Although it registered a sharp decline 
in 2008 sparked by the global financial crisis, Brazil's financial account recovered rapidly 
in 2009-11, reaching a surplus of US$110.8 billion in 2011, a 25% increase from 2007. Foreign 
direct investment has been a key driver for this growth, with inflows almost doubling between 2007 and 2011. The surplus declined to US$72.8 billion in 2012, mainly due to a sharp 
decline in portfolio investment inflows. 
1.36.  As a result of the financial and economic crisis, Brazil's overall balance of payments 
deteriorated sharply in 2008, leading to a much smaller, albeit still positive gain of foreign exchange reserves. Despite a significant rebound since then, it has been unable to recover to 
pre-crisis levels, although it accumulated large reserves during the period (see below). In 2011, 
the overall balance reached almost US$59 billion, compared to US$87 billion registered in 2007; it declined to US$18.9 billion in 2012.  
1.37.  Thanks to its financial account surplus, Brazil has managed to more than double its foreign 
exchange reserves since 2007, which reached US$378.6 billion in 2012, equivalent to 14.9 months of imports of goods and services. In the IMF's evaluation, Brazil's levels of reserves are more than 
adequate to help it withstand eventual external shocks.
34 
                                               
32 The Relationship Between Exchange Rates and Inte rnational Trade. Exchange Rate Misalignment and 
Trade Remedies: A Conceptual Note by Brazil. WTO document WT/WGTDF/W/68, 5 November 2012. 
33 Central Bank of Brazil (2011) and (2007). 
34 IMF (2012a). WT/TPR/S/283 • Brazil 
 
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  Table 1.4 Balance of payments, 2007-12 
(US$ million) 
 2007  2008  2009  2010a 2011a 2012a 
Current account 1,551  -28,192  -24,302  -47,272  -52,473 -54,246  
Balance on goods (f.o.b.) 40,032 24,836 25,290 20,147 29,794 19,431 
Exports 160,649 197,942 152,995 201,915 256,040 242,580 
Imports -120,617 -173,107 -127,705 -181,768 -226,246 -223,149 
Services and income (net) -42,510 -57,252 -52,930 -70,322 -85,251 -76,523 
Services -13,219 -16,690 -19,245 -30,835 -37,932 -41,075 
Credit 23,954 30,451 27,728 31,599 38,209 39,864 
Debit -37,173 -47,140 -46,973 -62,434 -76,141 -80,939 
Income -29,291 -40,562 -33,684 -39,486 -47,319 -35,448 
Credit 11,493 12,511 8,826 7,405 10,753 10,888 
Debit -40,784 -53,073 -42,510 -46,892 -58,072 -46,335 
Current unilateral transfers 4,029 4,224 3,338 2,902 2,984 2,846 
Capital and financial account 89,086  29,352  71,301  99,912  112,380 72,762  
Capital accountb 756 1,055 1,129 1,119 1,573 -1,877 
Financial account 88,330 28,297 70,172 98,793 110,808 74,639 
Direct investment 27,518 24,601 36,033 36,919 67,689 68,093 
Abroad -7,067 -20,457 10,084 -11,588 1,029 2,821 
Equity capital -10,091 -13,859 -4,545 -26,782 -19,533 -7,555 
Intercompany loans 3,025 -6,598 14,629 15,195 20,562 10,377 
In the reporting country 34,585 45,058 25,949 48,506 66,660 65,272 
Equity capital 26,074 30,064 19,906 40,117 54,782 52,838 
Intercompany loans 8,510 14,994 6,042 8,390 11,878 12,434 
Portfolio investments 48,390 1,133 50,283 63,011 35,311 8,273 
Assets 286 1,900 4,125 -4,784 16,858 -8,260 
Equity securities -1,413 257 2,582 6,211 8,801 -2,275 
Debt securities 1,699 1,643 1,542 -10,995 8,057 -5,986 
Liabilities 48,104 -767 46,159 67,795 18,453 16,534 
Equity securities 26,217 -7,565 37,071 37,671 7,174 5,600 
Debt securities 21,887 6,798 9,087 30,124 11,278 10,934 
Financial derivatives -710 -312 156 -112 2 25 
Assets 88 298 322 133 252 150 
Liabilities -799 -610 -166 -245 -249 -125 
Other investments 13,131 2,875 -16,300 -1,024 7,804 -1,753 
Assets -18,552 -5,269 -30,376 -42,567 -39,005 -24,278 
Liabilities 31,683 8,143 14,076 41,543 46,809 22,525 
Errors and omissions -3,152  1,809  -347  -3,538  -1,271 384  
Overall balance 87,484  2,969  46,651  49,101  58,637 18,900  
Memorandum items:       
Current account (% of GDP) 0.1 -1.7 -1.5 -2.2 -2.1 -2.4 
Gross official reserves (US$ million)c 180,334 206,806 239,054 288,575 352,012 378,613 
  Months of imports 13.7 11.3 16.4 14.2 14.0 14.9 
Gross external debt (US$ million) 193,219 198,340 198,192 256,804 298,204 309,491d 
Gross external debt / GDP (%) 14.1 12.0 12.2 12.0 12.1 13.4 
Gross public external debt / GDP (%) 6.3 5.1 5.9 4.8 4.1 4.7 
a Preliminary data. 
b Includes capital unrequited transfers and granting of brands and patents. 
c Includes outstanding repo lines of  credit and foreign currency loans. 
d Data for January - September 2012 only. 
Source: Central Bank of Brazil. 
1.38.  Brazil's external debt increased significantly during the review period, reaching 
US$309.5 billion in 2012. However, as a share of GDP, it fell from 14.1% in 2007 to 13.4% 
in 2012. Most of Brazil's new debt is private; th e share of the public sector in foreign debt was 
4.7% in 2012 (Table 1.4). 
1.6  Structural Issues and Policy Responses 
1.39.  While Brazil's commodity exports continued to perform well during the review period, some 
sectors of the Brazilian economy lost competitivene ss, as reflected by the growing deficit in both 
the manufacturing and services trade balance (secti on 1.7). The loss of dynamism in these sectors 
can be partly attributed to the appreciated real  and the global economic crisis, both of which 
resulted in reduced demand for Brazilian goods and services. However, it also reflects long-WT/TPR/S/283 • Brazil 
 
- 24 - 
 
  standing structural problems affecting Brazil's competitiveness, including: a complex and onerous 
tax system; infrastructure bottlenecks; highly regulated labour markets; high interest rates;  and a 
high cost for industrial inputs. 
1.40.  In a recent survey conducted by the Worl d Economic Forum, tax regulations and rates are 
cited among the three most problematic factors for doing business in Brazil. Not only are tax rates 
relatively high compared with other Latin American countries, but Brazil's tax system is also especially burdensome given its complexity and fragmentation. Brazilian companies disburse on 
average 67% of their profits on taxes and charges
35, and spend some 2,600 hours calculating and 
paying taxes (the average in Latin America is 392 hours).36 Heavy taxation is also reflected in 
Brazil's energy costs for industry, whic h are among the highest in the world. 
1.41.  Brazil's inadequate infrastructure has been identified as the second most problematic factor 
for businesses. In the WEF's Global Competitiveness Report,  the country's overall infrastructure is 
ranked 107th out of 144 in terms of quality. Port and ai r transport infrastructure is particularly 
deficient, with numerous terminals operating beyond capacity (Chapter 4.5.4 and 4.5.5). 
Investments in infrastructure remain limited37, reflecting low public savings as well as restrictions 
on private sector participation.  
1.42.  Brazilian labour laws are perceived as overly restrictive by business, particularly in regard to 
wage determination and hiring and firing practices. Excessive payroll taxation is also considered as 
a factor affecting the competitiveness of labour-intensive industries. Moreover, there is a lack of skilled workers in some sectors, reflecting gaps in the country's educational system.
38 
1.43.  Due to high interest rates, access to financing continues to be an important barrier to 
growth for Brazilian companies. Despite a significant reduction in recent years, lending interest 
rates to commercial customers remain high, averaging 23.8% per year (as of June 2012).39 This 
increases costs on investments and working capital for the Brazilian industry, thereby affecting its 
competitiveness vis-à-vis  its main international competitors. 
1.44.  The high cost of inputs is also an incr easingly important constraint for many Brazilian 
industries. According to a study that compared th e competitiveness of the Brazilian capital goods 
industry with its key international competitors, input costs throughout the supply chain constitute 
the main factor behind Brazil's higher costs of production.40 This issue can be partly attributed to 
taxation, inflation rates, and tariffs on imported inputs. 
1.45.  The Government has taken steps to address these and other structural issues under the 
industrial plan Brasil Maior , launched in 2011, which focusses on boosting competitiveness. With 
the aim of reducing production costs, the Govern ment has cut taxes and reduced charges levied on 
payroll in key manufacturing sectors and eliminated some charges on electricity. Additionally, in 
order to raise investment in infrastructure, the Government has granted concessions of some 
airports to the private sector, and recently unveiled a major programme of concessions for building and maintaining 17,500 km of roads and railways.
41 Significant steps have also been taken to 
reduce interest rates and expand credit, and temporary tariff reductions on a number of capital 
goods and industrial inputs have been applied.42 
                                               
35 WEF (2012). 
36 World Bank online information. Viewed at: http ://rru.worldbank.org/besna pshots/BecpProfilePDF.asp 
x?economy=brazil. 
37 Federal Government online inform ation. Viewed at: http://www.brasil.gov.br/sobre/o-brasil/o-brasil-
em-numeros-1/infraestrutura. 
38 The Brazilian Institute of Geography and Statistics (IBGE) online information. Viewed at:  
http://www.ibge.gov.br/home/presidencia/noticias/noticia_visualiza.php?id_noticia=1708. 
39 Ministry of Finance (2012). 
40 Abimaq (2010). 
41 Federal Government online info rmation. Viewed at: http://www.brasil.gov.br/noticias/arquivos/ 
2012/08/15/concessoes-de-rodovias-e-ferrovias-resultarao-em-investimentos-de-r-133-bi. 
42 WTO (2011); WTO (2012a). WT/TPR/S/283 • Brazil 
 
- 25 - 
 
  1.46.  However, in its bid to support economic se ctors suffering from a loss of competitiveness, the 
Brazilian Government also took a number of trade restrictive measures during the review period. 
This has included temporary tariff increases; the Government has also altered its procurement policy and introduced preferential margins of  between 8% and 25% for a limited number of 
domestic goods and services, mainly textiles and clothing, certain pharmaceuticals, and some 
transport equipment (Chapter 3.4.4). Also, un der the National Development Bank (BNDES) 
programmes, the Government expanded the offer of credit to Brazilian exporters, granting 
automatic access in some cases to products with domestic value added (Chapter 3.3.5). 
1.7  Developments in Tr ade and Investment Flows 
1.47.  Brazil's foreign trade (exports and imports) of goods and services accounted for 24.5% of 
GDP in 2012 (slightly down from 25.2% in 2007). In 2011, Brazil was the world's 16
th largest 
exporter and 15th largest importer of goods, and ranked 31st as exporter and 17th as importer of 
commercial services43, although it was the world's 6th largest economy.  
1.7.1  Merchandise trade 
1.48.  Despite a decline in 2009, Brazil's total merchandise trade increased at an average annual 
rate of 10.3% between 2007 and 2012. Exports of goods grew significantly, reflecting strong 
external demand for Brazilian commodities, in partic ular during the first years of the review period. 
However, the period was also marked by vigorous  domestic demand for imports, which expanded 
faster than exports, reducing Brazil 's trade surplus by more than 50%. 
1.7.1.1  Composition of trade 1.49.  Brazilian exports grew at an average a nnual rate of 8.6% between 2007 and 2012, reaching 
US$242.6 billion (Table AI.1). Primary products accounted for most of this growth, with mining 
and agricultural exports increasing by annual average rates of 15.4% and 12.3%, respectively. 
Exports from the manufacturing sector increased at an annual average rate of 1.8%. As a result of 
the faster expansion of commodity exports, th e share of manufactured products in overall 
merchandise exports decreased significantly over the same period, from 46.6% in 2007 to 33.8% in 2012. The share of primary products increased from 50.1% to 62.6%, thanks in particular to 
the strong performance of mining commodities (Chart 1.1). 
1.50.  Imports increased at an average annual rate of 13.1% between 2007 and 2012, almost 
doubling their value to US$223.1 billion. This grow th was largely due to imports of manufactured 
products, which increased at an average annual rate of 16.2%. Imports of primary products also 
registered significant growth at an average annual rate of 11.1% throughout the period. 
Manufactured goods continue to account for the la rgest share of imports, representing for 73.1% 
of total imports in 2012. Machinery and transport equipment remains the largest import category 
(38.4% of total imports), followed by chemicals an d fuels (Table A1.2 and Chart 1.1). Despite fast 
growth over 2007-11, both exports and imports declined in 2012. 
1.51.  While Brazil strengthened its position as a net exporter of agricultural and mining products, 
its trade deficit in the manufacturing sector deteriorated significantly during 2007-12 (Chart 1.2). 
The trade balance for machinery and transport equipm ent registered a particularly strong decline, 
reaching a deficit of US$47.4 billion in 2012. Nevertheless, Brazil made substantial gains in its terms of trade during most of the review years, thanks in part to high commodity prices in global 
markets. 
                                               
43 WTO (2012b).   WT/TPR/S/283 • Brazil 
 
- 26 - 
 
  Chart 1.1 Merchandise trade, by product, 2007 and 2012 
2007 2012
(a)    Exports (f.o.b.)
Total: US$160,649 million
(b)    Im ports 
Manufactures
63.9%
Total: US$120,621 million Total: US$223,149 millionTotal: US$242,580 millionIron & 
steel
6.3%Iron & steel
4.6%Other 
agriculture
3.8%Other 
manuf.
11.1%
Machinery 
& transport 
equip.
22.6%Agri.
35.6%
Chemicals
6.6%Food
31.8%
Other 
agriculture
3.8%
Fuels
10.9% Other 
mining
16.1%Chemicals
6.2%Other 
manuf.
7.2%
Mining
27.0%Agri.
30.1%
Mining
20.0%
Other 
agriculture
1.4%
Chemicals
19.0%
Other semi-
manuf.
4.9%Machinery 
& transport 
equip.
30.3%Other 
manuf.
7.8%
Other mining
4.8%Fuels
18.5%Food
4.6%
Chemicals
18.9%Other 
agriculture
1.1%Food
4.8%
Agri.
5.9%
Manufactures
73.1%Mining
20.9%Agri.
6.0%
Mining
23.3%Fuels
18.0%
Other mining
2.9%
Other semi-
manuf.
5.1%Machinery & 
transport 
equip.
38.4%Other 
manuf.
8.5%Food
26.2%
Manufactures
46.6%Manufactures
33.8%
Other mining
11.8%Fuels
8.3%
Iron & steel
2.0%Iron & steel
2.2%Other
3.3%
Machinery & 
transport 
equip.
15.8%Other
3.6%
Other
6.7%Other
0.1%
 
Source: UNSD, Comtrade database (SITC Rev.3). 
 WT/TPR/S/283 • Brazil 
 
- 27 - 
 
  Chart 1.2 Trade balance by sector, 2007-12 
(US$ billion) 
-90-80-70-60-50-40-30-20-1001020304050607080
Agriculture Mining Manufacturing
2007 2012
 
Source: WTO Secretariat, based on UNSD, Comtrade database. 
1.7.1.2  Direction of trade 
1.52.  The review period was marked by a strength ening of Brazilian trade ties with Asia; exports 
to the Asian continent increased by an annual average of 24.1% (Table A1.3). As a result, the share of Asia in Brazil's total exports increase d from 16.1% in 2007 to 31.3% in 2012 (Chart 1.3). 
Brazilian imports from the region also grew significantly, at an annual average of 17.4% 
(Table A1.4). China remains by far Brazil's main trade partner in Asia; since 2009, it has overtaken the United States as the second most important destination for Brazilian exports, after the European Union. China has also increased its importance as a source of imports for Brazil, 
accounting for 15.3% of total imports in 2012. The vast majority (97%) of Brazil's imports from 
China are manufactured products; in contrast, over 85% of Brazil's exports to China are primary products.
44  
1.53.  Despite the growing importance of Asian trade partners, the EU remains Brazil's main 
source of imports, as well as the most import ant destination for its exports (21.4% and 20.2%, 
respectively in 2012). Although imports from the EU increased at an average of 12.3% a year 
between 2007 and 2012, they lost some market shar e. Reflecting weaker economic activity in the 
block, Brazil's exports to the EU grew at a slower pace, at an annual average of 3.8%.  
1.54.  Trade with MERCOSUR members grew in nominal terms between 2007 and 2012, albeit at 
slower rates than Brazil's trade with key As ian partners. Imports from MERCOSUR members 
increased at an average of 10.5% annually, but th eir share declined slightly, to 8.6% in 2012. The 
share of MERCOSUR members in Brazil's total exports declined from 10.8% in 2007 to 9.4% 
in 2012.  
1.55.  In contrast with the trend during its last review period, the share of Brazil's exports to Africa 
decreased slightly between 2007 and 2012. Exports to the Middle East, however, continued to increase their share, reaching 4.8% of total Braz ilian exports in 2011. Brazil's imports from Africa 
lost market share during 2007-12, while those from the Middle East remained relatively stable.  
                                               
44 Ministry of External Re lations online information. Viewed at :  http://www.brasil globalnet.gov.br/ 
ARQUIVOS/IndicadoresEc onomicos/INDChina.pdf. WT/TPR/S/283 • Brazil 
 
- 28 - 
 
  Chart 1.3 Merchandise trade, by main origin and destination, 2007 and 2012 
2007 2012
(a)    Ex ports (f.o.b. )
Total: US$160,649 million
(b)    Im ports 
Total: US$120,62 1 million Total: US$223,149 millionChina
6.7%
Total: US$242,580 millionMERCOSUR
10.8%Others
13.7%United States
15.8%
MERCOSUR
9.4%
Other 
America
13.7%
MERCOSUR
9.6%Other Asia
6.7%
America
32.6%United 
States
11.1%
Bol. Rep. of 
Venezuela
2.9%Other 
America
10.1%
EU(27)
20.2% Other Europe
1.8%Other Asia
11.0%Others
14.1%
America
43.3%
United States
15.7%
Other 
America
8.0%
EU(27)
22.2%Other 
Europe
2.5%Japan
3.8%
China
10.5%Other Asia
11.9%Others
14.3%United States
14.6%
MERCOSUR
8.6%
Other 
America
7.1%
EU(27)
21.4%Other 
Europe
2.1%Japan
3.5%
China
15.3%Other Asia
12.7%Others
11.9%
America
34.9%America
33.1%EU(27)
25.2%Bol. Rep. of 
Venezuela
2.1%
China
17.0%
Mexico
1.6%Mexico
2.7%Europe
22.0%Europe
26.9%
Europe
24.6%Asia
26.1%Asia
31.5%
Europe
23.5%Other Europe
1.7%Japan
2.7% Asia
16.1%Asia
31.3% Japan
3.3%
 
 
Source: UNSD, Comtrade database (SITC Rev.3). 
1.7.2  Trade in services 
1.56.  Brazil maintains a structural deficit in the services trade balance, which has increased 
significantly since 2007. In 2012, the deficit reached US$41.1 billion, as imports rose to US$80.9 billion (Table 1.5). The deficit is largely attributed to the negative balances in leasing WT/TPR/S/283 • Brazil 
 
- 29 - 
 
  equipment, travel, and transportation during the review years. The increased deficit in leasing 
equipment is associated with a rise in the use of foreign-owned capital goods. The deficit in the travel industry has expanded more than four-fol d due to the sharp increase in travel payments 
made by Brazilians abroad, triggered in part by the appreciation of the real. In transportation 
services, the deficit doubled between 2007 and 2012, consistent with the increase in international 
travel and foreign trade flows. During the review period, Brazil maintained a positive balance in 
the business, professional and technical services segment, which was associated with growing 
receipts in administrative services and real estate leasing, architectural and engineering services, 
and other professional services. 
Table 1.5 Trade in services, 2007-12 
(US$ million) 
 2007  2008  2009  2010 2011 2012  
Balance       
Services -13,219  -16,690  -19,245  -30,835 -37,952 -41,075  
 Transportation -4,384  -4,994  -3,926  -6,407 -8,334 -8,769  
     Sea transport -2,182  -2,809  -2,096  -3,554 -4,681 -4,884  
     Air transport -2,177  -2,131  -1,802  -2,801 -3,594 -3,800  
     Other transportationa -26 -53 -28 -53 -60 -85 
 Travel -3,258  -5,177  -5,595  -10,718 -14,709 -15,588  
 Insurance -766 -837 -1,442  -1,113 -1,212 -994 
 Financial services 283  93 -42 394 858 709  
 Computer and information services -2,112  -2,598  -2,586  -3,296 -3,800 -3,850  
 Royalties and license fees  -1,940  -2,232  -2,078  -2,453 -2,710 -3,156  
 Operational leasing services -5,771  -7,808  -9,393  -13,752 -16,686 -18,741  
 Government services -1,134  -1,116  -1,416  -1,388 -1,411 -1,446  
 Communication services 180 167 186 164 116 69 
 Construction services 12  14 10 22 10 10  
 Merchanting and other trade-related services  19 435 615 247 296 119 
 Business, professional and technical services  6,230  8,147  7,297  8,413 10,699 11,552  
 Personal, cultural and recreational services -578 -783 -878 -948 -1,068 -991 
Credit       
Services 23,954  30,451  27,728  31,599 38,209 39,864  
 Transportation 4,119  5,411  4,040  4,931 5,819 5,422  
     Sea transport 3,347  4,576  3,283  4,061 4,836 4,527  
     Air transport 648 675 612 646 753 689 
     Other transportationa 123 160 145 225 230 205  
 Travel 4,953  5,785  5,305  5,702 6,555 6,645  
 Insurance 543  828 373 416 505 541  
 Financial services 1,090  1,238  1,570  2,073 2,662 2,648  
 Computer and information services 161  189 209 210 236 596  
 Royalties and license fees  319 465 434 397 591 511 
 Operational leasing services 31  55 50 54 69 64  
 Government services 1,340  1,628  1,483  1,527 1,774 1,742  
 Communication services 276  466 353 435 320 381  
 Construction services 17 23 14 29 19 24 
 Merchanting and other trade-related services  956 1,361  1,443  1,128 1,262 1,145  
 Business, professional and technical services  10,076  12,915  12,374  14,629 18,346 20,067  
 Personal, cultural and recreational services 73  86 80 69 54 43  
Debit       
Services -37,173  -47,140  -46,974  -62,434 -76,161 -80,939  
 Transportation -8,503  -10,405  -7,966  -11,339 -14,153 -14,191  
     Sea transport -5,529  -7,385  -5,379  -7,615 -9,517 -9,411  
     Air transport -2,825  -2,806  -2,414  -3,447 -4,347 -4,490  
     Other transportationa -149 -213 -173 -277 -289 -290 
 Travel -8,211  -10,962  -10,898  -16,420 -21,264 -22,233  
 Insurance -1,308  -1,665  -1,815  -1,529 -1,717 -1,535  
 Financial services -807  -1,145  -1,612  -1,679 -1,804 -1,975  
 Computer and information services -2,273  -2,787  -2,795  -3,505 -4,036 -4,447  
 Royalties and license fees  -2,259  -2,697  -2,512  -2,850 -3,301 -3,666  
 Operational leasing services -5,802  -7,863  -9,442  -13,806 -16,755 -18,804  
 Government services -2,473  -2,744  -2,899  -2,915 -3,185 -3,188  
 Communication services -96 -299 -166 -271 -204 -311 
 Construction services -4  -9 -4 -6 -9 -14  
 Merchanting and other trade-related services  -938 -926 -828 -881 -965 -1,026  
 Business, professional and technical services  -3,846  -4,768  -5,077  -6,216 -7,647 -8,505  
 Personal, cultural and recreational services -651 -869 -958 -1,017 -1,121 -1,034  
a Includes road transportation. 
Source: Central Bank of Brazil, Annual Report,  several issues; data provided by the authorities; and IMF, 
BOPs database for 2010 and 2011 transportation data. WT/TPR/S/283 • Brazil 
 
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  1.7.3  Foreign direct investment 
1.57.  Brazil's expanding domestic market, ab undant natural resources, and economic growth 
contributed to a sharp increase of foreign direct investment (FDI) flows into the country over the review period. FDI inflows amounted to US$60.5 b illion in 2012, almost twice as much as in 2007, 
and were equivalent to 2.7% of GDP (Table 1.6). Overall, during the 2008-12 period, FDI flows to 
Brazil totalled US$258.8 billion (up from US$112. 8 billion in 2003-07). Although FDI inflows 
declined by 13% in 2012, compared with 2011, they remained high, suggesting that, despite 
recent concerns over the dynamism of its economy, Brazil is still attractive for long-term investors. 
As of mid-2012, Brazil was the world's sixth largest recipient of FDI and the leading FDI destination in Latin America.
45 Brazil's stock of FDI represents some 30.7% of GDP.  
Table 1.6 Foreign direct investment (equity) inflows by country, 2007-12 
(US$ million and %) 
 2007 2008 2009  2010  2011  2012 2007-12 (%) 
Total 34,335 44,457 31,679  52,583  69,530  60,543 293,127 100.0 
Netherlands 8,129 4,639 6,515 6,702 17,582 12,213 55,780 19.0 
United States 6,073 7,047 4,902 6,144 8,910 12,310 45,386 15.5 
Luxembourg 2,857 5,937 537 8,819 1,867 5,965 25,982 8.9 
Spain 2,202 3,851 3,424 1,524 8,593 2,523 22,117 7.5 
Japan 501 4,099 1,673 2,502 7,536 1,471 17,782 6.1 
France 1,233 2,880 2,141 3,479 3,086 2,155 14,974 5.1 
Switzerland 905 803 380 6,445 1,194 4,333 14,060 4.8 
United Kingdom 1,053 693 1,032 1,030 2,749 1,978 8,535 2.9 
Canada 819 1,442 1,372 751 1,789 1,950 8,123 2.8 
Germany 1,801 1,086 2,473 538 1,125 826 7,850 2.7 
Cayman Islands 1,604 1,556 1,092 406 612 619 5,889 2.0 
Chile 717 264 1,027 941 830 2,013 5,792 2.0 
Austria 116 93 48 3,420 1,508 108 5,293 1.8 
British Virgin Islands 371 1,048 403 1,059 1,138 857 4,875 1.7 
Bermuda 1,497 1,038 380 854 800 151 4,720 1.6 
Norway 284 207 671 1,540 1,073 936 4,711 1.6 
Australia 494 1,154 707 556 1,079 518 4,508 1.5 
Portugal 517 1,051 384 1,203 491 551 4,197 1.4 
South Korea 265 628 132 1,045 1,075 875 4,021 1.4 
Hong Kong, China 13 35 34 83 2,077 508 2,751 0.9 
Italy 313 385 232 300 457 986 2,674 0.9 
Bahamas 603 1,101 52 109 96 138 2,098 0.7 
Uruguay 212 424 198 275 301 567 1,977 0.7 
Sweden 64 55 214 387 467 476 1,662 0.6 
Mexico 409 220 167 143 297 386 1,623 0.6 
Singapore 24 91 91 38 252 999 1,496 0.5 
Belgium 91 78 93 75 420 656 1,412 0.5 
Denmark 122 171 47 295 151 483 1,269 0.4 
Netherland Antilles 29 477 6 11 4 580 1,107 0.4 
Panama 141 96 132 132 248 228 978 0.3  
China 24 36 83 395 179 185 905 0.3 
Peru 1 429 45 89 141 115 820 0.3 
Ireland 64 75 8 15 184 426 773 0.3 
Colombia 167 54 152 188 47 156 763 0.3 
Argentina 70 127 80 100 97 262 736 0.3 
Mauritius 2 5 9 336 120 22 494 0.2 
Finland 88 185 56 42 56 19 446 0.2 
Cyprus 5 45 70 41 134 120 415 0.1 
Hungary 0 106 61 183 13 40 405 0.1 
Others 456 743 558 386 750 837 3,730 1.3 
Source: WTO Secretariat, based on informatio n provided by the Central Bank of Brazil. 
1.58.  The Netherlands remains Brazil's main source of foreign direct investment, accounting for 
19% of total FDI inflows during the period 2007-12, followed by the United States, Luxembourg, 
Spain, and Japan. With the exception of the United States, the shares of these countries in total 
FDI inflows increased during the review period, in  particular those of Spain and Japan. With a 
share of 0.7% of all FDI inflows in 2007-12, Ur uguay was the only MERCOSUR country among the 
top 30 sources of FDI into Brazil. 
                                               
45 UNCTAD (2012). WT/TPR/S/283 • Brazil 
 
- 31 - 
 
  1.59.  The services sector remains the preferre d destination for FDI inflows, having received 
US$94.2 billion during 2007-12 (Table 1.7). However,  the sector's share in total FDI declined 
from 51% in 2003-07 to 42.7% in 2007-12. Within the services sector, financial services, commerce, and telecommunications attracted the hi ghest values of FDI. The telecommunications 
market was particularly dynamic during 2007-11, its share in total FDI inflows increasing from 
1.6% to 9.6%, and then declining to 0.6% in 2012;  the share of financial services decreased over 
the same period. The industrial sector attracted 38%  of total FDI during the review period, almost 
the same proportion as in 2003-07. Investments in industry were directed mainly to basic 
metallurgy and beverages. Foreign investment in primary activities accounted for 18.9% of total FDI. The bulk of investments were in oil and gas and metallic minerals, reflecting the increased interest of foreign investors in Brazil's natural resources, and recent oil discoveries. 
Table 1.7 Foreign direct investment (equity) inflows by sector, 2007-12 
(US$ million and %) 
 
2007 2008 2009 2010 2011 2012 2007-
12 2007-
12 
(%) 
Total 34,335  44,457  31,679  52,583  69,530  60,543 293,127 100.0  
Crop, livestock and mineral extraction 4,751  12,995  4,597  16,261  10,297  6,528 55,429 18.9 
  Oil and gas extraction 797  1,339  2,656  9,905  5,976  3,679 24,352 8.3  
  Metallic mineral extraction 3,073  10,645  1,303  4,804  2,389  1,652 23,866 8.1 
  Mining support service activities 272  231 209 840 964 597 3,112 1.1  
  Crop, livestock and related services 303 498 255 354 541 386 2,336 0.8 
  Forestry production 260  118 165 348 359 80 1,330 0.5  
  Non-metallic mineral extraction 41 162 7 10 68 132 420 0.1 
  Others 6  3 2 0 0 2 12 0.0  
Industry 13,481  14,013  13,481  21,273  26,837  22,206 111,291 38.0 
  Basic metallurgy 4,699  4,984  3,754  5,549  7,215  5,311 31,511 10.8  
  Beverages 69 12 116 366 4,265  511 5,339 1.8 
  Foodstuff 1,752  2,226  451 1,716  3,064  5,076 14,284 4.9  
  Chemical products 1,378  859 1,557  7,181  2,226  1,871 15,072 5.1 
  Coke, oil derivatives and biofuels 1,644  1,568  1,344  1,681  1,801  384 8,422 2.9  
  Non-metallic mineral products  454 651 225 1,197  1,551  625 4,703 1.6 
  Motor vehicles, trailers, semi-trailers 
and related parts 861 964 2,163  533 1,395  1,256 7,172 2.4  
  Plastic and rubber products 494 671 437 213 1,102  670 3,586 1.2 
  Computer equipment, electronic and 
optical products 159 145 325 766 975 713 3,083 1.1  
  Machinery and equipment 428 506 390 348 616 959 3,248 1.1 
  Electrical machines, devices and 
apparatuses 385 335 357 80 607 781 2,546 0.9  
  Pulp, paper and pape r products 477 200 770 78 387 747 2,660 0.9 
  Pharmaceuticals 160  290 688 659 303 1,575 3,675 1.3  
  Wood products, except furniture 39 104 211 48 295 151 848 0.3 
  Metal products, except machinery 
and equipment 51 144 128 391 178 353 1,245 0.4  
  Publishing activities 58 5 204 28 158 49 503 0.2 
  Other transportation equipment 17  55 73 103 125 250 624 0.2  
  Other manufacturing 124 107 79 93 79 584 1,066 0.4 
  Tobacco products 6  7 8 14 66 7 108 0.0  
  Textile products 90 51 70 69 42 85 408 0.1 
  Repai r of computers and personal 
and household goods 5 3 1 14 17 11 50 0.0  
  Other industries 131 126 128 146 371 237 1,138 0.4 
Services 16,103  17,449  13,601  14,702  31,987  31,444 125,287 42.7  
  Telecommunications 551 447 310 659 6,670  345 8,982 3.1 
  Commerce, except vehicles 2,759  2,564  2,326  2,619  5,701  5,700 21,670 7.4  
  Electricity and gas 1,055  909 970 1,165  3,341  2,061 9,502 3.2 
  Financial and auxiliary services 4,524  5,109  2,891  1,852  3,184  4,900 22,460 7.7  
  Insurance, reinsurance, 
complementary social security and 
health assistance 516 474 1,320  229 2,403  4,640 9,581 3.3 
  Real estate activities 822  1,721  593 1,590  2,195  3,649 10,571 3.6  
  Buildings and specialized 
construction activities 1,240  1,386  717 664 1,164  955 6,125 2.1 
  Non financial holdings 376  640 389 857 851 815 3,929 1.3  
  Infrastructure works 121 337 426 209 785 689 2,566 0.9 
  Information technology services 191  390 858 577 676 704 3,396 1.2  
  Transportation 387 652 511 735 532 1,088 3,906 1.3 WT/TPR/S/283 • Brazil 
 
- 32 - 
 
   
2007 2008 2009 2010 2011 2012 2007-
12 2007-
12 
(%) 
  Non real estate lease and intangible 
assets 77 79 190 221 479 687 1,734 0.6  
  Storage and transportation auxiliary 
activities 121 413 317 446 466 595 2,358 0.8 
  Headquarter consulting and 
management activities 1,607  176 183 189 462 336 2,952 1.0  
  Architectural and engineering 
services 132 186 92 263 456 726 1,855 0.6 
  Food and beverage service activities 76  55 20 119 442 124 837 0.3  
  Office services and other services 
rendered to corporations 164 373 255 265 377 1,229 2,663 0.9 
  Scientific research and development 22  17 20 54 363 25 502 0.2  
  Advertising and market research 94 97 55 175 303 322 1,046 0.4 
  Mail services ..  .. .. 178 117 541 836 0.3  
  Lodging 108 113 262 211 116 88 897 0.3 
  Commerce and maintenance of 
vehicles 81 96 73 112 108 127 596 0.2  
  Education 49 179 57 478 62 47 871 0.3 
  Travel agencies and tour operators 27  6 7 17 33 51 140 0.0  
  Auxiliary radio and television 
activities 0 0 0 410 6 23 439 0.1 
  Collection, treatment and 
distribution of water 3 123 .. 11 1 1 139 0.0  
  Other services 1,000  908 761 395 692 977 4,733 1.6 
  Acquisition and sale of property ..  .. .. 347 409 364 1,120 0.4  
.. Not available. 
Source: WTO Secretariat, based on informatio n provided by the Central Bank of Brazil. 
 WT/TPR/S/283 • Brazil 
 
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  2  TRADE POLICY REGIME: FRAMEWORK AND OBJECTIVES 
2.1  Introduction 2.1.  Brazil considers the multilateral trading system fundamental to attaining its development 
goals based on sustainable and socially inclusive economic growth. Brazil aims to strengthen 
regional economic integration and is one of the WTO's most active participants. Brazil did not ratify 
the Fourth Protocol on telecommunications and is undertaking domestic procedures to ratify fully the Fifth Protocol on financial services. From October to 2008 to October 2012, Brazil initiated 
three complaints under the WTO dispute settlement mechanism. 
2.2.  Brazil is a founding member of the Southern Common market (MERCOSUR), and as such it 
has preferential trade agreements with the Plurin ational State of Bolivia, Chile, Colombia, Cuba, 
Ecuador, Mexico, Peru, and the Bolivarian Repulic of Venezuela. Additionally, it has bilateral 
preferential agreements under LAIA with Guya na and Suriname. Together with its MERCOSUR 
partners, Brazil has preferential trade agreements currently in force with India and Israel, and three further agreements pending entry into force. The European Union and MERCOSUR have re-
launched negotiations in order to create a Bi-regional Free Trade Agreement.   
2.3.  The Brazilian foreign investment regime was largely unmodified during the period under 
review. Foreign investors in Brazil receive the same legal treatment as local investors in most 
economic sectors. Foreign investment is restricted in activities such as health, mass media and 
telecommunications, aerospace industry, rural prop erty, and maritime and air transport. Foreign 
investment continues to be promoted mostly through tax deductions and low-cost financing, although these incentives apply equally to local and foreign investors. 
2.4.  Brazil remains committed to providing South-South trade-related cooperation within the WTO 
Aid-for-Trade (AFT) initiative, particularly in Africa, Latin America, and the Caribbean. Brazil's AFT strategy is focused on the biofuels, agriculture, and energy sectors. Brazil is also a recipient of AFT 
support. As member of the WTO Aid-for-Trade Task Force, Brazil participated actively in the 
development of technical support and capacity-building activities. 
2.2  General Legal and Institutional Framework 
2.5.  The Federative Republic of Brazil is formed  by the Union, the states, municipalities, and the 
Federal District. The Government is composed of the Executive, Legislative, and Judiciary 
branches. The President, assisted by the appoin ted Cabinet of Ministers, exercises Executive 
power. Presidential terms are four-years long, with  one re-election possible. The last election took 
place in October 2011.   
2.6.  Legislative bodies at the federal, state, an d municipal levels are in charge of drafting and 
issuing legislation. Federal legislative powers are vested in and exercised by the bicameral National 
Congress, which comprises the Chamber of Deputies and the Federal Senate. Members of the 
former are proportional to each jurisdiction's population and are elected for a period of four years. Three Senators are elected to represent each Stat e and the Federal District in the Federal Senate 
for a period of eight years. One third of the senators are replaced in the first four-year period and 
two thirds in the second four-year period. 
2.7.  The Constitution establishes that legislation for certain matters may be passed exclusively by 
the National Congress; such is the case for foreign trade, telecommunications, monetary policy, 
maritime and air transport, insurance, and utilitie s. In addition, Congress has responsibility for 
legislating on all matters within the competence of the Union, including international treaties. Legislation for education, social security, and health may be issued concurrently by the federal and 
state legislatures, whilst municipalities may only issue laws on areas of local interest and to 
supplement federal and state legislation where pertinent.
1 
2.8.  The legislative process includes the prep aration and enactment of ordinary, supplementary, 
and delegated laws, as well as amendments to the Constitution, legislative decrees, and 
                                               
1 Articles 22, 24 and 30 of the Federal Constitution; and Federal Constitution, Title IV (Chapter I, 
Section II). WT/TPR/S/283 • Brazil 
 
- 34 - 
 
  resolutions. The 1988 Constitution of the Republic is the fundamental law of the State. There have 
been 70 amendments to the Constitution since its promulgation; 12 occurred between 2009 and October 2012.
2 Supplementary laws are legally superior to ordinary laws, and may be voted only 
under circumstances specified in the Constitution. Unlike ordinary laws, their approval requires an 
absolute majority in both chambers. The President may draft laws upon delegation from the 
Congress; this has only taken place twice since 1988.  
2.9.  The judiciary is composed of the Supreme Fe deral Court, the Superior Court of Justice, the 
federal regional courts and federal judges, and other special courts and judges. 
2.10.  The President may resort to provisional measures on issues considered to be of particular 
importance and urgency, under the provisions of Article 62 of the Constitution. Provisional measures become effective upon publication, and should be analysed by Congress upon enactment 
and voted on within 60 days. Given that they have the same legal status, many of Brazil's ordinary 
laws originate as provisional measures. In the case of tax issues, provisional measures dictated before the end of the fiscal year may only be applied on the following year's Budget, except for 
customs duties on imports, export taxes, Tax on Industrial Products (IPI) and financial operations 
(IOF), or extraordinary taxes created in case of war. Legislative decrees are administrative in nature and require a simple majority in Congress.  
2.11.  International treaties and conventions must be approved by Congress to enter into force 
domestically. After enactment, through a legislative decree and a Presidential decree, international treaties have the same legal status as ordinary laws; the Supreme Federal Court may deem them incompatible with the Federal Constitution and hence revoke them. 
2.3  Trade Policy Formulation and Implementation and Objectives 
2.12.  The Chamber of Foreign Trade (CAMEX) is in  charge of formulating, adopting, coordinating, 
and implementing trade policy on goods and services (since its creation in 1995).
3 It is part of the 
Government Council of the Presidency of the Repu blic. CAMEX's main decision body is the Council 
of Ministers, chaired by the Minister of Developm ent, Industry and Foreign Trade, and comprising 
the ministers of Civil House, Foreign Affairs, Finance, Agriculture and Supply, and Agrarian 
Development. 
2.13.  Given that several public bodies have competence for designing and implementing 
measures related to foreign trade, CAMEX provides guidelines and coordinates these activities. Public bodies other than the aforementioned mini stries must consult CAMEX on issues related to 
trade policy, with the exception of financial market issues which are governed by the National 
Monetary Council and the Central Bank. The Minist ry of Development, Industry and Foreign Trade 
implements trade policy following the guidelines provided by CAMEX through the Secretariat of 
Foreign Trade (SECEX) and its five department s: Foreign Trade Operations (DECEX); Trade 
Remedies (DECOM); International Trade Negotiations (DEINT); Planning and Development of Foreign Trade Policies (DEPLA); and Rules and Competitiveness in Foreign Trade (DENOC), and 
through the Secretariat of Commerce and Services Policies (DECOS). 
2.14.  The Ministry of External Relations is the representative to the WTO in Geneva and assists 
CAMEX with regard to regional integration and trade, amongst other issues. The Ministry of 
Finance formulates and implements economic policy, and is in charge of customs and tax policy 
and revenue collection. The private sector may participate in trade policy formulation through the 
CAMEX Private Sector Advisory Council (CONEX). 
2.15.  Brazil's current foreign policy framework is consistent with the framework described in its 
last Trade Policy Review.
4 One of the country's main foreign po licy goals is to seek opportunities 
                                               
2 Brazilian Government online information. Vi ewed at: http://www.planalto.gov.br/ccivil_03/ 
Constituicao/Emendas/Emc/quadro_emc.htm. There is  a link to each one of these amendments (in 
Portuguese). 
3 Functions defined in Decree No. 4,732 of 10 June 2003. 
4 Speech by Minister of State and External Relations Ambassador Antonio de Aguiar Patriota upon 
beginning his tenure, Brasilia, 2 January 2011. Viewed at: http://www.itamaraty.gov.br/sala-de-imprensa/ discursos-artigos-entrevistas-e-outras-comunicacoes/mini stro-estado-relacoes-exteriores/discurso-do-ministro-WT/TPR/S/283 • Brazil 
 
- 35 - 
 
  and create conditions for international trade to underpin its development scheme, based on 
sustainable and socially inclusive economic growth . As a result of the economic crisis and the 
protracted multilateral trade negotiations, Brazil has focused its efforts on strengthening regional economic integration through MERCOSUR and ALADI. In addition, it has initiated public 
consultations through CAMEX to examine how Brazilian economic agents perceive potential 
free-trade agreements with the EU and Canada.
5 Notwithstanding these priorities, Brazil remains 
fully committed to the successful conclusion of the Doha Development Agenda negotiations and to 
the multilateral trading system in general.6 In particular, it pursues comprehensive reforms that 
lower the barriers for its agricultural products, whilst promoting more democratic international decision-making bodies and advocating for the rightful use of trade defence initiatives by 
developing countries.
7 
2.16.  The incumbent Government has formulated the Plano Brasil Maior  (Greater Brazil Plan), 
encompassing its industrial, technological, and foreign trade policies. The Plan is meant to uphold sustainable economic growth in an adverse econ omic environment, and to guarantee that Brazil 
emerges after the economic crisis in a better position than before it.
8  
2.4  Foreign Investment Regime 2.17.  The legal framework for foreign investment in Brazil remains generally unmodified since its 
last Review. Foreign investment is regulated by Law No. 4,131 of 3 September 1962 (Foreign 
Capital Law)
9 and its subsequent modifications in 1964 (Law No. 4,390 of 29 August 1964), and 
further amendments. Foreign and national capital in Brazil receive the same legal treatment under equal circumstances following Constitutional amendments passed in 1995, which prohibit all forms 
of discrimination not explicitly foreseen in the law. 
2.18.  The Federal Government aims to continue promoting direct investment, particularly in 
transport infrastructure, energy, aeronautics, and other technology-intensive sectors, in order to 
overcome production bottlenecks, spur competitiveness, and hence support economic growth. The 
incentives offered to investors consist generally of tax exemptions and low-cost financing, but do not usually include cash grants for initial outlays
10; they normally do not distinguish between 
domestic and foreign investors. Investment from al l sources is expected to increase to 23.2% of 
GDP by 2015 partly as a result of the second ph ase of the Growth Acceleration Programme (PAC), 
the exploration of oil and gas deposits in the pre- salt area, and the organization of the 2014 FIFA 
World Cup and the 2016 Olympic Games.11 
2.19.   Investment in all forms must be registered with the Central Bank through the Electronic 
Statement of Registration - Foreign Direct Investment Module (RDE-IED), on the Central Bank's Information System (SISBACEN). Foreign capital must be registered within 30 days of the date it 
enters Brazil or after customs clearance in the case of goods. Remittances abroad, reinvestment of 
profits, dividends, and other resour ces, and repatriation of invested capital must also be registered 
with the Central Bank. Foreign capital does not require Central Bank authorization provided it is 
                                                                                                                                               
antonio-de-aguiar-patriota-na-cerimonia-de-transmissao-do-cargo-de-ministro-de-estado-das-relacoes-
exteriores-1/. 
5 Statement by Minister of State and External Relations Ambassador Antonio de Aguiar Patriota at the 
Opening Ceremony of the Forum "The BRICS and the WTO Dispute Settlement System", Brasilia, 10 October 2012. Viewed at: http://www.itamaraty.gov.br/sala-de-imprensa/notas-a-imprensa/ pronunciamento-do-senhor-ministro-de-estado-das-relacoe s-exteriores-embaixador-antonio-de-aguiar-patriota 
-na-cerimonia-de-abertura-do-seminario-os-brics-e-o-sistema-de-solucao-de-controversias-da-omc-2013-brasilia-10-de-outubro-de-2012/. 
6 Valor Econômico , "Diplomacy and Trade", ar ticle by Minister of Stat e and External Relations 
Ambassador Antonio de Aguiar Patriota, 10 October 2012. Viewed at: http://www.itamaraty.gov.br/sala-de-imprensa/discursos-artigos-entrevistas-e-outras-comunicacoes/ministro-estado-relacoes-exteriores/ diplomacia-e-comercio-artigo-do-ministro-antonio-de-aguiar-patriota-valor-economico-de-10-10-2012. 
7 Statement by President Dilma Rousseff at the opening of the general debate of the 67th session of the 
United Nations General Assembly. Viewed at: http ://www.itamaraty.gov.br/sala-de-imprensa/discursos-
artigos-entrevistas-e-outras-comunicacoes/presidente-d a-republica-federativa-do- brasil/statement-by-h.-e.-
dilma-rousseff-president-of-the-feder ative-republic-of-brazil-at-the-opening-of-the-general-debate-of-the-
67th-session-of-the-united-nations-general-assembly-new-york-25-september-2012. 
8 Brasil Maior.  Viewed at:  http://www.brasilmaior.mdic.gov.br/conteudo/128. 
9 As further regulated and put into effect by Decree No. 55,762 of 17 February 1965, as amended. 
10 KPMG (2011). 
11 Ministry of Planning, Budget and Administration (2012). WT/TPR/S/283 • Brazil 
 
- 36 - 
 
  registered.12 The invested sum must be registered in the currency in which the investment was 
made.13 
2.20.  There are no restrictions on remittance of dividends or profits abroad, other than their 
adequate registration in the RDE-IED module. Remittances paid to foreign shareholders or 
partners are not taxed. The same conditions apply for reinvestment. The capitalization of profits, 
dividends, interest on equity capital and profit reserves in the receiving company in which they were produced are registered under the reinvestment item of the DFI module of the RDE. The 
registration of reinvestment is made in the currency of the country to which income could have 
been remitted, or in local currency. Repatriation of capital is also exempt from income tax, unless it exceeds the original investment (capital gains), in which case a 15% income tax is withheld.  
2.21.  Until 2010, intangible assets imported with out coverage of an exchange contract required 
prior approval from the Department of Financial Compliance and Financial Information Treatment 
(DECIC) of the Central Bank.
14 This requirement was removed by Resolution CMN No. 3,844/2010. 
2.22.  Foreign investors may participate in Brazilian financial institutions insofar as there are 
international or reciprocity agreements or agreemen ts of interest to the Brazilian Government. An 
Executive Branch Decree is necessary for the establishment of foreign financial institutions in Brazil. Registration in the RDE-IED should be preceded by authorization to invest in capital by the 
Central Bank's Financial Organization Department (DEORF).
15  
2.23.  In order to invest in the Brazilian financial and capital markets, non-resident individuals and 
collective entities must register with the Brazilian Securities Exchange Commission (CVM) and appoint a local representative to register their transactions in the RDE-Portfolio Module of the 
SISBACEN. Upon registration, investors may partic ipate freely in the fixed- and variable-income 
markets.
16 Financial assets and securities as well as other types of investments must be 
registered, and maintained under custody or in deposit accounts in institutions authorized for such 
purposes or in registration, settlement or custody systems recognized or authorized by the CVM or 
the Central Bank. 
2.24.  Resident as well as non-resident acquirers of assets located in Brazil (or their attorney-in-
fact in the case of non-residents) are responsible for withholding and paying income tax applicable 
to capital gains. There are no differences between residents and non-residents with regard to taxation of capital gains obtained in Brazil. The foreign purchaser of an investment registered with the Central Bank of Brazil is entitled to register the capital under his name in the same amount 
(number of shares) previously held by the selling part, regardless of the price paid for the 
investment.
17  
2.25.  Foreign investment is restricted in activities involving health services (except health 
insurance).18 Nuclear energy and postal services activities are under Federal Government 
monopoly. Courier services may be provided by enterprises legally constituted in Brazil.19 Foreign 
investors may not manage newspapers, magazines, and other publications, or television and radio 
networks, or hold more than 30% of their capital, except for naturalized citizens settled in Brazil 
for more than ten years. Under the provisions of Law No. 12,485, cable TV services are completely open to foreign investment (Chapter 4.5.2). 
2.26.  Brazilian nationals, foreigners that reside  permanently in Brazil, and companies established 
in the country (regardless of the origin of their capital) may participate in fishing activities in 
Brazilian territorial waters provided they are authorized by the Special Secretariat for Aquaculture 
                                               
12 Central Bank of Brazil (2012e). 
13 Ministry of External Relations (2012). 
14 Ministry of External Relations (2012). 
15 The information requiremen ts that must be submitted when filing  for application to operate are listed 
in Central Bank Circular No. 3,317 of 29 March 2006. 
16 In 2005, the two foreign exchange markets (i.e . free and floating) were unified through the 
enactment of the Regulation of Foreign Exchan ge Market and International Capital (RMCCI). 
17 Law No. 10,833 of 29 December 2003, and Ministry of External Relations (2012). 
18 Aerospace activities banned to fo reigners include the launching and orbital positioning of satellites, 
spacecraft, aircraft and related activities, but not the manufacture or marketing of these items or accessories. 
19 Law No. 6,538 of 22 June 1978. WT/TPR/S/283 • Brazil 
 
- 37 - 
 
  and Fisheries. A similar authorization and further specific requirements are necessary to operate in 
the mining and hydrocarbons sectors.  
2.27.  Regular public air transportation services require a concession from the Government. 
Foreign management and stock ownership are restricted, although the restrictions have been 
reduced recently by the Brazilian Senate (Chapter 4.5.3).20 
2.28.  Foreign investor participation in companies carrying out domestic highway freight transport 
services is currently unlimited.21 International road transport is reserved to companies that have at 
least 50% of capital with voting rights held by citizens of the seven member countries of the 
International Land Transport Agreement of the Southern Cone.22 Maritime transport is open to 
vessels of all countries that provide reciprocal treatment to Brazilian vessels, but only Brazilian 
individuals or corporations established in the count ry may bear the Brazilian flag (Chapter 4.5.4).23  
2.29.  Brazil has signed 14 bilateral investment agreements (BITs).24 Brazil has negotiated two 
MERCOSUR protocols on investment: the Buenos Aires Protocol (extra-MERCOSUR), and the Colonia Protocol (intra-MERCOSUR).
25 However, none of these agreements or protocols is in force, 
either because the Executive did not submit the agreement to Congress (e.g. Colonia Protocol) or 
because it withdrew the agreement before Congress had voted (e.g. Buenos Aires Protocol and the BIT with France).  This reflects the concerns held in Congress about the constitutionality of the 
agreements with respect to issues such as upholding the principle of full equality for investors 
under the law. The authorities note that concerns raised by Congress with respect to the BITs signed by Brazil included: (i) the preferential trea tment accorded to foreign investors as a result of 
the BITs dispute settlement mechanisms; (ii) the broad definition of investment contained in the 
BITs; (iii) the requirement in the BITs for prompt  payment of expropriations in freely convertible 
currencies, which was considered incompatible with the Federal Constitution, which specifies that expropriations for reasons of agrarian reform ar e to be compensated by Agrarian Reform Bonds, 
for example; and (iv) the ambiguity caused by the concept of indirect expropriation. 
2.30.  Brazil signed a new double taxation agreement with Peru in 2009, adding to a list of 
29 countries. Germany dismissed its tax treaty with Brazil in 2006.
26 
2.31.  Brazil adhered to the Multilateral Invest ment Guarantee Agency (MIGA) convention in 1992, 
and joined the OECD Investment Committee in 1998 as an observer. It has not joined the International Centre for Settlement of Investme nt Disputes (as of October 2012). Prior to 
becoming an OECD observer, Brazil subscribed to its 1976 Declaration and Decisions on 
International Investment and Multinational Enterprises.  
2.5  International Relations 2.5.1  World Trade Organization 
2.32.  Brazil joined the WTO upon its creation an d grants MFN treatment to all its trading partners. 
Brazil has specific commitments on financial services under the GATS. The Fifth Protocol passed a second hearing in the Brazilian Congress in 2008,  but full approval remains pending. Successive 
                                               
20 Ministry of External Relations (2012). 
21 Law No. 11,442 of 5 January 2007, last updated on 15 June 2012. Viewed at: http://www.planalto. 
gov.br/ccivil_03/_ato2007-2010/2007/lei/l11442.htm. 
22 The ATIT (ALADI/AAP/A14TM/3) is a partial scope agreement subscribed under the framework of the 
Treaty of Montevideo of 1980 of the Latin America Integration Association (LAIA). 
23 Law No. 9,342 last updated on 2 March 2012. Viewed at: http://www.planalto.gov.br/ccivil_03/leis/ 
L9432.htm. 
24 Belgium-Luxembourg, Chile, Cuba, Denmark, Finland,  France, Germany, Italy, the Republic of Korea, 
the Netherlands, Portugal, Switzerland, the United Kingdom, and Venezuela.  (ICSID Database of Bilateral Investment Treaties. Viewed at: http://icsid.wor ldbank.org/ICSID/ FrontServlet?requestType=ICSID 
PublicationsRH&actionVal=ViewBilateral&reqFrom=Main). 
25 Respectively, MERCOSUR Decision No. 11/94, Protoc ol on Promotion and Prot ection of Investment 
Proceeding from Non-Member Countries of the MERCOSUR , viewed at: http://www.cvm.gov.br/port/relinter/ 
ingles/mercosul/buenos-e.asp.; and MERCOSUR Decision No. 11/93, Protocol of Colonia for the Promotion and 
Reciprocal Protection Of Investments in MERCOSUR (investment within member countries), viewed at: 
http://www.cvm.gov. br/ingl/inter/mercosul/coloni-e.asp. 
26 Executive Decree DEC No. 5,654/2005 of 29 December 2005. WT/TPR/S/283 • Brazil 
 
- 38 - 
 
  notifications at the Committee on Trade in Financial Services have indicated that it is undergoing 
domestic procedures and that it is not possible to indicate a precise timetable for completion.27 
Brazil has not ratified the Fourth Protocol or made specific commitments on basic telecommunications.  
2.33.  Brazil considers the WTO to be the main arena where the most pressing issues in 
international trade should be discussed. Theref ore, it remains committed to strengthening the 
existing multilateral trade system and to the successful conclusion of the Doha Development 
Agenda (DDA).
28 It participates actively in the WTO individually, as a prominent voice for 
developing countries, and within the BRIC S group of leading emerging economies.29 For instance, 
in 2011, Brazil submitted a proposal to discuss the link between currency exchange rates and 
international trade in order to examine possible tools or remedies to deal with currency 
fluctuations (see also Chapter 1).30 Brazil participates in the Friends of Anti-Dumping Negotiations 
(FANs) and in the Coalition of Agricultural Exporting Nations Lobbying for Agricultural Trade Liberalization. In the DDA, Brazil has presented in dependently and together with other delegations 
a number of proposals related to, inter alia , agriculture, trade in services, intellectual property 
rights and rules.
31  
2.34.  Brazil has submitted the majority of its re quired notifications to the WTO during the period 
under review (Table A2.1). 
2.35.  Brazil was a respondent in two cases under the WTO Dispute Settlement Mechanism in the 
period under review. Both disputes were initiated before 2008, and had been concluded as of October 2012 (Table 2.1). In addition, Brazil has initiated three complaints since its last Review, 
related to anti-dumping duties on frozen meat of fowls, seizure of generic drugs, and anti-dumping 
administrative reviews and other measures related to orange juice imports. With regard to the case against the United States on subsidies on upland cotton, initiated in 2002, Brazil was 
authorized to adopt retaliatory measures by th e Appellate Body. Since the establishment of the 
WTO, Brazil has been a defendant in 14 cases, a complainant in 26 cases and a third party to 73 cases.  
Table 2.1 WTO dispute settlement cases invo lving Brazil, January 2009-December 2012 
Subject of dispute Respondent/ 
complainant Status WTO 
document 
Brazil as respondent 
Measures on retreaded tyres 
from the EC Brazil/European 
Communities Panel Report circulated: 12 June 2007. Appellate Body 
report circulated: 3 December 2007. Article 21.3(c) 
Arbitration Report circulated: 29 August 2008. 
Implementation notified by respondent on 25 September 
2009. series 
WT/DS332 
Anti-dumping measures on 
certain polyethylene 
terephthalate resins Brazil/Argentina The DSB established a panel in July 2007. On 4 February 
2008, the Chairman of the Panel informed the DSB that 
Argentina had indicated that the Foreign Trade Chamber of Brazil had adopted a decision on 29 January 2008, to suspend the application of anti-dumping duties on 
imports of PET resin from Argentina. Therefore, 
Argentina asked the Panel to suspend its work. Panel proceedings were suspended and its authority lapsed on 5 February 2009. series 
WT/DS355 
Brazil as complainant 
Anti-dumping duties on 
frozen meat of fowls South 
Africa/Brazil Complainant requested consultations on 21 June 2012. 
No panel established and no withdrawal or mutually 
agreed solution has been notified. series 
WT/DS439 
Seizure of generic drugs in 
transit European Union 
and a Member 
State/Brazil Complainant requested consultations on 21 June 2012. 
No panel established and no withdrawal or mutually 
agreed solution has been notified. series 
WT/DS409 
                                               
27 WTO document S/FIN/M/56, 16 June 2008, and S/FIN/M/73, 30 July 2012. 
28 Statement by Minister of State and External Relations Ambassador Antonio de Aguiar Patriota at the 
Opening Ceremony of the Forum "The BRICS and the WTO Dispute Settlement System", Brasilia, 10 October 2012. Viewed at: http://www.itamaraty.gov.br/sala-de-imprensa/notas-a-imprensa/ pronunciamento-do-senhor-ministro-de-estado-das-r elacoes-exteriores-embaixador-antonio-de-aguiar-
patriota-na-cerimonia-de-a bertura-do-seminario -os-brics-e-o-sistema-de-solucao-de-controversias-da-omc-
2013-brasilia-10-de-outubro-de-2012. 
29 WTO document WT/MIN(11)/18, 16 December 2011. 
30 WTO document WT/WGTDF/W/56, 20 September 2011. 
31 The main proposals are indicated in WTO (2009), p. 19. WT/TPR/S/283 • Brazil 
 
- 39 - 
 
  Subject of dispute Respondent/ 
complainant Status WTO 
document 
Anti-Dumping administrative 
reviews & other measures related to imports of certain 
orange juice United 
States/Brazil Panel Report circulated: 25 March 2011. Report adopted 
with recommendation to bring measures into conformity: 17 June 2011. series 
WT/DS382 
Subsidies on upland cotton United 
States/Brazil Panel Report circulated: 8 September 2004. Appellate 
Body Report circulated: 3 March 2005. Article 21.5 Panel 
Report circulated: 18 December 2007. Article 21.5 
Appellate Body Report circulated: 2 June 2008. 
Authorization to retaliate granted on 19 November 2009. series 
WT/DS267 
Source: WTO Secretariat. 
2.5.2  Preferential agreements 
2.5.2.1  General features 2.36.  Brazil is a founding member of the Southern Common Market (MERCOSUR), together with 
Argentina, Paraguay, and Uruguay. In accordance with MERCOSUR document CMC/27-12, the 
Bolivarian Republic of Venezuela was ratified as a full member of MERCOSUR in 2012. As part of 
MERCOSUR, Brazil has preferential trade agreements (Economic Complementarity Agreements) 
with Chile, Bolivia, Mexico, Peru, Colombia, Ecuador, Venezuela, and Cuba. In the period under 
review, two further MERCOSUR agreements entered into force with India and Israel. In addition, 
Brazil has preferential agreements with Guyana and Suriname within the framework of the Latin 
American Integration Association.  The scope of the different preferential agreements varies widely 
(Table 2.2). 
Table 2.2 Scope of selected  preferential agreements Agreement 
Nomenclature 
Number 
of lines 
Average 
reduction 
(%) 
Reduction 
range 
(%) 
Preferential 
rates 
(%) 
Number of 
lines subject 
to preferential 
quota 
AAP25TM38 
Brazil/Guyana HS96  127 100.0  100 100 8 
ACE35 
MERCOSUR/Chile HS96  6,508 97.5 0-100  0, 17, 28, 30, 33, 34, 91, 100  52 
ACE53 
Brazil/Mexico HS96  792 66.9  0-100  0, 20, 25, 30, 40, 45, 50, 60, 70, 75, 80, 100 8  
ACE55 
MERCOSUR/Mexico HS02  244 100.0  100 100 12 
ACE58 
MERCOSUR/Peru HS96  6,515 100.0  0-100  0, 100   
ACE36 
MERCOSUR/Bolivia HS96  6,524 98.4 30-100  30, 50, 100  2 
ACE59 
MERCOSUR/Colombia HS96  6,524 93.0  0-100  0, 30, 40, 44, 50, 55, 60, 1, 63, 70, 72, 73, 
77, 80, 81, 87, 88, 95, 100 39 
ACE59 
MERCOSUR/Venezuela HS96  6,522 96.4 0-100  0, 50, 55, 61, 65, 66, 70, 77, 81, 83, 87, 90, 
100 6 
ACE59 
MERCOSUR/Ecuador HS96  6,524 97.6  0-100  0, 50, 55, 61, 69, 77, 81, 90, 100 171  
ACE62 
MERCOSUR/Cuba HS02  2,132 96.8 33-100  33, 50, 60, 70, 75, 80, 90, 100  
ACE 
MERCOSUR/India HS02  452 13.6  10-100  10, 20, 100  2 
ACE 
MERCOSUR/Israel HS02  9,423 55.0 30-100  30, 37.5, 75, 100   
AAP25TM41 
Brazil/Suriname HS02  3 (rice) 100.0  100 100 3 
.. Not available. 
Source:  WTO Secretariat, based on data provided by the authorities. WT/TPR/S/283 • Brazil 
 
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  2.5.2.2  MERCOSUR 
2.37.  MERCOSUR is Brazil's main preferential ag reement in terms of value of trade, comprising 
some 10% of its merchandise trade.32 The bloc was established in 1991 by the Treaty of 
Asuncion33, and its institutional structure was define d in the 1994 Protocol of Ouro Preto.  
2.38.  The Common Market Group (GMC) and the Council for the Common Market (CMC) are the 
main executive and decision-making bodies of ME RCOSUR. The purpose of the CMC is to formulate 
policy and promote actions that help to configure the Common Market; it is composed of the 
Ministers of External Relations and Economy of the member countries.34 The GMC oversees the 
application of the Treaty of Asuncion, and its protocols and agreements, and it may make recommendations to the Council. Consequently, it is entitled to issue mandatory Resolutions that apply to all member countries. It is also in charge of negotiations with third countries, groups of 
countries, and international organizations. The Trade Commission is responsible for the application 
of common trade policy instruments. 
2.39.  MERCOSUR member states share a common ex ternal tariff (CET), which entered into force 
on 1 January 1995. Various exceptions have been allowed through Decisions by the CMC. All 
MERCOSUR member states are currently authorized to have an exception list, although there are different provisions for each country. Decision CMC 56/10 established the creation of an ad hoc  
group to examine the current CET structure an d submit a proposal for the Common Market 
Group's consideration in 2014. Brazil is allowed to establish special tariffs for informatics and telecommunications goods (BIT)
35 until the end of 2015 and for capital goods (BK) until the end 
of 2013. In the context of the global economic  crisis, MERCOSUR member states were also 
authorized by Decision CMC 25/12 to increase their tariffs for up to 200 tariff lines until the end 
of 2014, within WTO bound rates (Chapter 3.2.3). 
2.40.  The Agreement on the Elimination of Doub le Collection of CET and the Distribution of 
Customs Revenue in MERCOSUR, approved by Deci sion 54/04, grants local MERCOSUR status to 
imported products that conform to the Common Tariff Policy (PAC). Its implementation consists of three phases.
36 The first phase entails granting 0% CET to all merchandise imported by a member 
country with 100% preferential tariffs under MERCOSUR agreements with third parties. The second 
stage would cover the remaining goods.37 The third stage will require implementing a customs 
revenue distribution mechanism and the unification of customs systems in all member states. Since 2010, MERCOSUR member states have been negotiating the implementation of these three 
phases, according to Decisions CMC 10/10 and 56/10. In the context of the global economic crisis, 
MERCOSUR member States were also authorized by Decision CMC 25/12 to increase their tariffs for up to 200 tariff lines until the end of 2014, within WTO bound rates. 
2.41.  The sugar and automotive sectors are the only exclusions to free circulation within 
MERCOSUR. There is no schedule for the inclusion of sugar in the free-trade-regime. Trade in the 
automotive sector between Brazil and MERCOSUR members is still largely regulated by bilateral 
agreements, which were renegotiated in the period under review.
38 The regional agreement on 
automotive policy ratified by member states in 2000 and 2001 did not enter fully in force as originally planned. In 2010, Decision CMC 56/10 called for the establishment of a working group to 
draft a new common automotive policy.
39 At end 2012, the working group had not yet been 
convened. 
                                               
32 As of August 2012, available information on MERCOSUR trade includes its four original members 
(Argentina, Brazil, Paraguay, and Uruguay) but does not include Venezuela. 
33 MERCOSUR is incorporated in the LAIA legal regi me as Economic Complementarity Agreement No. 18. 
LAIA economic complementarity agreements must be open for accession by any LAIA country. 
34 MERCOSUR online information. Viewed at: http://www.mercosur.int/t_generic.jsp?contentid=3862& 
site=1&channel=secretaria&seccion=2. 
35 Decisions CMC 39/05, 13/06, 27/06, 61/07, 58/08 and 57/10. 
36 MERCOSUR CMC/DEC 10/10. 
37 This stage is subject to the ratification and entry into force of the Customs Code. MERCOSUR 
CMC/DEC 27/10 and MERCOSUR CMC/DEC 34/11. 
38 Brazil/Argentina: 39th Additional Protocol to the ACE-14; Brazil/Uruguay: 68th Additional Protocol to 
the ACE-02; Argentina/Uruguay: Partial Agreement No. 57. 
39 MERCOSUR Decision CMC 56/10. Viewed at: http://www.mercosur.int/innovaportal/v/2376/1/ 
secretaria/decisiones_2010. WT/TPR/S/283 • Brazil 
 
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  2.42.  Dispute settlement in MERCOSUR is regulated by the Protocol of Olivos, signed 
in February 2002 and in force since January 2004. Under the Protocol of Olivos, member states may choose to file disputes either within MERCOSUR or at the WTO. Upon agreement by the parties, the Common Market Group may provide mediation. Cases are handled by an Ad Hoc Court 
of Arbitration (TAHM) and/or by the Permanent Revi ew Court (PRC), composed of five arbitrators. 
During the period under review, Brazil did not participate in any disputes within MERCOSUR.
40  
2.43.  The 19th Additional Protocol of MERCOSUR modified by the 49th Additional Protocol 
establishes and regulates the application of safeguard measures on imports from third parties. It 
was ratified internally by Brazil, but is pending approval in other member states for entry into 
force. The Protocol of Montevideo on Trade in Services entered into force on 7 December 2005 
between Argentina, Brazil, and Uruguay. It establis hes a schedule for services liberalization within 
MERCOSUR, to be completed by December 2015.  The Protocol on Government Procurement, 
negotiated in 2006, has not entered into force, and member states are currently committed to concluding its revision.
41 
2.5.2.3  Other trade arrangements and agreements 
2.44.  In the period under review, two preferenti al trade agreements entered into force between 
MERCOSUR and extra-bloc partners: a partial-sco pe agreement with India, which was signed 
in January 2004 and entered in force in June 2009, and a free-trade agreement with Israel, which 
was signed in September 2007 and entered in force in September 2011.42 Additionally, MERCOSUR 
has negotiated and signed a preferential agreement that has yet to enter into force with the Southern African Customs Union (SACU), as well as free-trade agreements with Egypt and the 
State of Palestine (Table 2.3), which are likewise not yet in force).
43 The Republic of Syria and 
MERCOSUR signed a Framework Agreement to start fo rmal negotiations to create a free-trade area 
in December 2010, which have not yet been initiated.44 
Table 2.3 Preferential agreements, 2008-12  
Trade Agreements that entere d in force after October 2008  
Preferential trade agreement between MERCOSUR and India 
Signature date / Entry into force 25 January 2004 / 1 June 2009 (For all MERCOSUR 
members) 
Provisions  
Goods Yes 
Services  No 
Transition for full implementation  n.a. 
Excluded goods (number of lines) 9,378 
Duty-free tariff lines  
2012 4.6%  
After transition period n.a. 
Notification to WTO WT/COMTD/N/31 
Free trade agreement between MERCOSUR and Israel 
Signature date / Entry into force 18 December 2007 / 3 April 2010 (For Brazil)  
Provisions  
Goods Yes 
Services  No 
Transition for full implementation  2019 
Excluded goods (number of lines) 408 
Duty-free tariff lines  
2012 95.8% 
After transition period 95.8% 
Notification to WTO Not notified 
                                               
40 MERCOSUR online information. Viewed at: http://www.mercosur.int/t_generic.jsp?contentid=374& 
site=1&channel=secretaria&seccion=5. 
41 MERCOSUR - Joint Communiqué of the Presidents of the Member States, 29 June 2012. Viewed at: 
http://www.mercosur.int/innovaportal/file/4488/1/comunicado_conjunto_presidentes_ep.pdf. 
42 For a full list of MERCOSUR agreements, se e: http://www.mercosur.int/t_ligaenmarco.jsp? 
contentid=4823&site=1&channel=secretaria. 
43 MERCOSUR Decisions CMC 54/08, CMC 26/10, and CMC 35/11, respectively. 
44 MERCOSUR Decision CMC 34/10. WT/TPR/S/283 • Brazil 
 
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  Trade Agreements that entere d in force after October 2008  
Preferential trade agreement between MERCOSUR and Southern African Customs Union 
Signature date / Entry into force 15 December 2008 / Pending 
Provisions  
Goods Yes 
Services  No 
Transition for full implementation  n.a. 
Excluded goods (number of lines) 8,780 
Duty-free tariff lines  
2012 10.7% 
After transition period 'Fixed preferences' agreement 
Notification to WTO Not notified 
Free trade agreement between MERCOSUR and Egypt 
Signature date / Entry into force 2 August 2010 / Pending 
Provisions  
Goods Yes 
Services  No 
Transition for full implementation  10 years after entry into force 
Excluded goods (number of lines) 197 
Duty-free tariff lines  
2012 98% 
After transition period 98% 
Notification to WTO Not notified 
Free trade agreement between MERCOSUR and the State of Palestine 
Signature date / Entry into force 20 December 2011 / Pending 
Provisions  
Goods Yes 
Services  No 
Transition for full implementation   10 years after entry into force 
Excluded goods (number of lines) 408 
Duty-free tariff lines  
2012 95.8% 
After transition period 95.8% 
Notification to WTO Not notified 
n.a. Not applicable. 
Source: Ministry of Development, Industry and Foreign Trade, Online information. Viewed at: 
http://www.desenvolvimento.gov.br/sitio/inte rna/interna.php?area=5&menu=405; MERCOSUR 
Secretariat Online Information. Viewed at: http://www.mercosur.int/t_generic.jsp?contentid=2639& site=1&channel=secretaria; WTO (2012), Trade Policy Review: Uruguay, Geneva. WTO Document 
WT/TPR/S/263. 
2.45.  Negotiations with the European Union on a free-trade agreement with MERCOSUR were re-
launched in 2010, after being stalled for six years.45 The Bi-Regional Negotiations Committee 
(CNB) is currently holding regular meetings; the most recent was in Brasilia in October 2012. Negotiations are concentrated on creating a regulatory framework for trade in goods and services, 
market access, dispute settlement, investment, co mpetition, technical barriers, and other issues.
46 
Brazil and the EU have a strategic partnership; their last summit was held in Brussels in October 2011.
47   
2.46.  Brazil participates in the Global System of Trade Preferences among Developing Countries 
(GSTP), and grants preferences to participating countries on some 98 HS96 tariff headings. The preferences range from to 10% to 50% and include agricultural products, fuels, chemical products, 
hides and skins, ferrous and steel products.
48 
                                               
45 Viewed at: http://www.desenvolvimento.gov.br/ sitio/interna/interna.php?area=5&menu=2635&refr 
=1893. 
46 Viewed at: http://eeas.europa.eu/delegation s/brazil/press_corner/all_news/news/2012/20121101_ 
01_en.htm. 
47 Viewed at: http://www.consilium.europa.eu/uedocs/cms_Data/docs/pressdata/EN/foraff/124878.pdf, 
and httpp://www.it amaraty.gov.br. 
48 For the complete list, see: http://www.unctadx i.org/Secured/GSTP/Concessions/mercosur_en.pdf. WT/TPR/S/283 • Brazil 
 
- 43 - 
 
  2.6  Aid for Trade 
2.47.  Brazil participates actively in the Aid-for-Trade (AFT) initiative, both providing South-South 
cooperation and as a middle-upper income Official Development Assistance (ODA) recipient.  
2.48.  As a South-South partner, Brazil remains committed to providing trade-related Cooperation 
to developing countries.49 Together with the G20 countries, Brazil pledged in 2010 to maintain 
support for AFT at levels that reflect the average for the period 2006 to 2008, as well as to monitor those commitments and evaluate their impact on low income countries (LICs).
50  
2.49.  The Brazilian Agency for Co-Operation (ABC) is part of the Ministry of External Relations' 
and is in charge of negotiating, coordinating, and implementing technical cooperation programmes. According to a WTO-OECD report, by 2011, Brazil had carried out some 300 technical assistance initiatives in Africa, with a total disbursement of US$60 million; the Cotton-4 
project, initiated in 2008 in Benin, Burkina Faso, Chad, and Mali is among the most successful.
51 
Brazil's current cooperation strategy is focused on climate change and green growth. The majority 
of its resources will be directed towards biofuels  and agriculture in Africa, Latin America, and the 
Caribbean. Other activities that Brazil has carried out include simplified export procedures through 
postal and courier services, the WTO dispute settlement system, trade policy and trade negotiations. The ABC has committed to invest US$36 million between 2013 and 2016 in 
development projects in Africa, and another US $40 million in Latin America and the Caribbean.
52  
2.50.  During the development of the AFT framework, Brazil proposed that it should not be 
conceived as a substitute for the development gains that result from negotiations on market access and the elaboration of balanced trade rules. Additionally, it proposed that AFT should be 
provided without imposing conditionality, and that "ownership" of cooperation initiatives should 
remain with the recipient rather than the donor or partner.
53 Brazil contributed to the development 
of technical support and capacity-building activities eligible under AFT schemes such as supply-side 
constraints, trade and poverty reduction frameworks, and social infrastructure programmes.54 
2.51.  As a recipient, Brazil received approximately US$470 million in AFT flows in 2010, a 
seven-fold increase from 2008.55 In the 2005-10 period, AFT flows to Brazil averaged 
US$154 million, primarily directed to the fore stry, agriculture, and energy sectors. 
                                               
49 Ministerial Declaration by BRICS Trade Ministers, Press Release 489, 14 December 2011. Viewed at: 
http://www.itamaraty.gov.br/sala-de-imprensa/notas-a -imprensa/declaracao-dos-ministros-de-comercio-do-
brics-genebra-14-de-dezembro-de-2011/. 
50 OECD-WTO (2011). 
51 OECD-WTO (2011). 
52 Brazilian Cooperation Agency online informat ion. Viewed at: http://www.abc.gov.br/abc_por/ 
webforms/interna.aspx?campo=457. 
53 WTO document WT/AFT/W/10/Rev.1, 7 June 2006. 
54 WTO document WT/AFT/W/10/Rev.1, 7 June 2006. 
55 Amounts expressed in constant 2010 U.S. dollars. Aid-for-Trade measures comprise technical 
assistance for trade policy and regulations, trade-relate d infrastructure, productive capacity building, including 
trade development, trade-related ad justment, and other trade-related needs. Viewed at: OECD Stats: 
http://www.oecd.org/dac/ai dfortrade/aid-for-tradestatisticalqueries.htm. WT/TPR/S/283 • Brazil 
 
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  3  TRADE POLICIES AND PRACTICES BY MEASURE 
3.1  Introduction 3.1.  Brazil's 2012 applied MFN customs tariff is entirely ad valorem,  with rates ranging from zero 
to 55%. The simple average MFN tariff applied in 2012 was 11.7%, up from 11.5% in 2008. The 
increase is due to both the change in classification and temporary derogations from the 
MERCOSUR Common External Tariff. Some 8% of tariff lines are duty free. The average applied tariff for the manufacturing sector is 12%. Brazil bound its entire tariff during the Uruguay Round. 
Tariffs on agricultural products (WTO definition) are bound at rates between 0% and 55%, while 
bound rates for non-agricultural products range from 0% to 35%.  
3.2.  Besides customs tariffs, im ports are subject to a number of internal taxes, including the Tax 
on Industrial Products (IPI); Tax on the Circulation of Goods and Services (ICMS); contributions to 
the social integration programme (PIS) and to finance social security (COFINS); and Tax on 
Services (ISS). The application of these taxes may vary depending on the product type, the competent sub-federal authority, and the importer's tax regime status, thus rendering Brazil's tax 
system complex. 
3.3.  Brazil continues to be a user of anti-dum ping measures: during the review period the number 
of new cases varied significantly from year to year, but with the exception of 2009 was above 
historical trends. In the first nine months of 2012, Brazil initiated 47 new investigations, exceeding 
the previous record of 40 investigations in 2010. There were 83 anti-dumping measures in place in mid-2012, compared with 63 reported in the last Review for October 2008. New legislation allows for the application of provisional measures, which was not previously the practice in Brazil.  
3.4.  Technical regulations may be established th rough laws, decrees or resolutions, and must be 
published in the Official Journal . Six months are typically allowed between the publication of the 
measure and its entry into force. Proposed technical regulations considered to have trade effects, 
are notified to the WTO for Members' comments. Al though the drafting of technical regulations is 
not centralized, most competent agencies follow the guidelines of the Good Regulatory Practice 
Guide,  which contains recommendations for their elab oration, dissemination, periodic review, and 
elimination. Most technical regulations enacted in Brazil are based on international standards; 
when this is not the case, they are based on performance criteria. The recommended period for 
review and revision of technical regulations is four years. 
3.5.  Brazilian law provides for the application of an export tax of 30%, which may be decreased or 
increased to up to 150% in order to address foreign-exchange or trade-policy objectives. In 
practice, the export tax is zero-rated, with the exception of a few products. The basis for assessing the export tax is the f.o.b. value or the price of th e good in the international market at the time of 
exportation, which must not be lower than the cost of acquisition or production of the good, 
increased by taxes and other contributions and a profit margin of 15% on the sum of costs and taxes.  
3.6.  Brazil maintains a number of programme s designed to promote the competitiveness of 
export-oriented companies, in particular small-sca le enterprises, and to increase exports. The 
authorities consider that ensuring tax neutrality for exports is a key element in this regard, and that this objective is served through the exemption of indirect taxes on exports, and the 
implementation of schemes such as the drawba ck system, export-processing zones, and other 
export-related duty and tax concessions. Since th e last Review of Brazil, several export support 
programmes have been modified or expa nded, and some have been introduced. 
3.7.  Brazil's competition regime has been overhauled and a new competition policy entered into 
force in May 2012. The main changes comprise significant institutional restructuring, a switch from ex post  to ex ante  control of mergers and acquisitions, and amendments regarding the scope of 
prohibited conduct and sanctions. 
3.8.  Incentives and government assistance ar e available at both the federal and sub-federal 
levels. Incentive programmes may be regional, aimed at developing research, or target specific sectors. Most initiatives tend to promote entr epreneurship, innovation, exports, and regional 
development. Specific programmes are in place for the automotive, information technology, WT/TPR/S/283 • Brazil 
 
- 45 - 
 
  aeronautics, and petroleum industries. Support meas ures include: loans; tax incentives; financial 
contributions; long-term and equity financing; accelerated depreciation; guarantees; grants; and 
credit insurance. 
3.9.  One of the Brazilian authorities' key concer ns continues to be the availability and cost of 
credit. In this respect, the authorities consider that  their policy of targeting credit is necessary to 
correct a market failure. To this end, Brazil has several official credit programmes aimed at different sectors and types of producers. The National Development Bank BNDES is the main 
institution providing credit or acting as a financial intermediary and guarantor. Credit takes the 
form of medium and long-term loans made available at attractive interest rates. The BNDES "equalizes" interest rates, that is, covers the di fference between the agreed rate and the relevant 
market interest rate.  
3.10.  Brazil has not joined the WTO Agreement on Government Procurement. Its procurement 
system is decentralized and, according to the Co nstitution, the procurement of goods, services, 
and public works must be conducted through tend ering procedures, unless otherwise specified in 
the law. Brazil's Tendering Law allows for preferen ces for goods and services produced in Brazil, or 
produced or supplied by Brazilian companies or by companies that invest in technology development in Brazil, in the case of equiva lent offers. Small busi nesses may benefit from 
preferential measures that may include quotas, preference margins of up to 10%, as well as 
tendering procedures restricted to small companies. A revision to the Tendering Law introduced in 2010 significantly altered Brazil's procurement legi slation, to make the granting of preferences a 
permanent feature of the regime and setting a new objective for Brazil's procurement policy: 
national sustainable development, in addition  to seeking the most advantageous offer and 
ensuring equality under the Law. In order to achi eve this goal, preferential margins of up to 25% 
may be granted for goods and services produced nationally and in accordance with Brazilian 
technical standards.  The preference margins for particular products, services or sectors are 
determined by the newly created Interministerial Commission for Public Procurement. 
3.11.  Brazil's legislation covers all the major aspects mentioned in the TRIPS Agreement. In some 
areas, including copyright, Brazil grants rights that exceed the minimum terms laid down in the 
Agreement. There has been no substantial legislative modification on intellectual property matters since 2009, except those that introduced the requirem ents for the registration of layout designs of 
integrated circuits and computer software. In April 2012, Brazil started a Pilot Programme of 
Priority Examination of "Green Patents", which fast-tracks patent applications filed in Brazil via the 
Paris Convention for the Protection of Industrial Pr operty by either residents or non-residents, with 
application date from 2 January 2011. 
3.2  Measures Directly Affecting Imports  
3.2.1  Procedures 3.12.  Commercial imports must be registered in Brazil's Integrated Foreign Trade System 
(SISCOMEX), while importers must register in the Registry of Exporters and Importers (REI) 
maintained by the Secretariat of Foreign Trade (S ECEX) at the Ministry of Development, Industry 
and Foreign Trade (MDIC). Inscription in the REI is free of charge and is done automatically, through the tax number (CUIT), at the time of the first transaction in SISCOMEX.  Although it may 
not be revoked, the inscription may be suspended for up to 2 years as a sanction for 
import-related fraud. Import transactions with payment terms exceeding 360 days are subject to 
registration with the Central Bank; transfers abroad as payment for imports are only permitted if 
the respective import declaration is registered in SISCOMEX with planned payment details 
(cobertura cambial ).
1  
3.13.  All services and intangible transactions between Brazilian and foreign residents must be 
registered in the Integrated System of Trade in  Foreign Services, Intangible Assets and Other 
Operations (SISCOSERV), which became operational on 1 August 2012.2 This applies to the 
Brazilian party (resident) involved in the transaction; exemptions may be granted for transactions 
                                               
1 Central Bank of Brazil, RMCCI-International Ca pital and Foreign Exchange Market Regulation, 
Circular No. 3,401 of 15 August 2008. Viewed at: http://www.bcb.gov.br/htms/normativ/CIRCULAR3401.pdf. 
2 Law No. 12,546 of 14 December 2011. WT/TPR/S/283 • Brazil 
 
- 46 - 
 
  valued at less than US$20,000 per month, if undertaken by natural persons, as well as for legal 
entities under the Simplified Tax Regime and individual micro-entrepreneurs.  
3.14.  SISCOMEX operations may be performed by a customs broker or directly by the importer; 
prior accreditation (habilitação) from the Secretariat of Federal Revenue of Brazil (RFB) is required 
in both cases, except for goods declared with a simplified import declaration (see below). The 
accreditation is free of charge and is valid indefinitely. Depending on the applicant's estimated financial capacity, accreditations may be limited (c.i.f. value of imports capped at US$150,000 per 
semester) or unlimited; certain legal entities are eligible for an express accreditation, freeing them 
from financial capacity evaluation. Effective October 2012, estimates of financial capacity (valid for 6 months) are based on the applicant's tax payments or employee-related social security contributions, whichever is greater, over the previous five years.
3 According to the authorities, the 
import cap has a risk-mitigation purpose; importers may apply for an unlimited accreditation, 
provided that they are able to demonstrate their actual financial capacity. No fees are charged for 
the accreditation. Individuals may only import goods in quantities that non-commercial practices 
would justify; SECEX is competent to determine on a case-by-case basis what constitutes a 
commercial practice.4 
3.15.  Customs brokers may import goods on behalf of third parties only after the actual acquirer 
of the goods (e.g. legal representative of the purchasing company) has been accredited to use 
SISCOMEX and has designated his representative (customs broker). Customs brokers must be registered in the Customs Register; they are free to operate throughout Brazil's customs territory 
and to set the fees for their services independen tly. Only Brazilian citizens may act as customs 
brokers in Brazil. There are no restrictions to co mpetition among brokers.  A digital certificate, 
issued by an accredited certification authority is needed to access SISCOMEX and SISCOSERV. As of August 2012, the SISCOMEX may be accessed via the Internet, as an alternative to the 
traditional dedicated network.
5 
3.16.  Clearance of commercial imports is based on an import declaration (ID); the requisite 
supporting documentation6 must be produced only if the import declaration has been selected for 
documentary or physical examination. The dutiable value of all imports is the sum of the purchase 
cost and all expenses incurred for insurance and freight up to the point of entry into Brazil.7 
Eligibility for preferential tariff treatment must be attested by a certificate of origin for each shipment of the merchandise in question. Certain goods imported directly from abroad, such as 
animals, plants, flammables, and goods transported by land, river/lake, or in bulk, may be 
declared prior to their arrival; as from July 2009, prior authorization from the relevant customs 
clearance unit is no longer required.
8 Brazil has also put in place a mechanism for the provision of 
advance rulings on tariff classification; the rulings' duration of validity is not limited.9 
3.17.  Importers are responsible for all customs fo rmalities and duties. Import duties are payable 
upon registration of the ID in the SISCOMEX an d the amount due is withdrawn automatically from 
a registered bank account.10 Should there be a need to delay the final determination of their 
customs value, imported goods may be released under a guarantee. Each ID registered in SISCOMEX is subject to a fee of R$185; addition al fees, ranging from R$29.5 (first two items) 
to R$2.95 (item 51 and beyond), are payable for each item listed on the ID.
11  
3.18.  Import declarations are processed accordin g to a risk assessment method that provides for 
four channels: green (automatic clearance), ye llow (document inspection), red (document and 
physical inspection), and grey (document, physical  and fraud-related inspection). The risk analysis 
                                               
3 Normative Instruction RFB No. 1,288 of 31 Au gust 2012 and Executive Declaratory Act No. 33 
of 28 September 2012. 
4 Ordinance No. 23 of 14 July 2011. 
5 RFB online information. Viewed at: http://www. receita.fazenda.gov.br/adu ana/siscomex/Importacao 
WEB/texto.htm. 
6 For the documents that should accompany the ID, see WTO (2005), Secretariat Report, 
Chapter III (2)(i). 
7 According to the authorities, import insurance is not compulsory. 
8 Normative Instruction SRF No. 680 of 2 October 2006, as amended by Normative Instruction RFB 
No. 957 of 15 July 2009. 
9 RFB Ordinance No. 740 of 2 May 2007. 
10 Importers may arrange to use their cust oms broker's account for that purpose. 
11 Normative Instruction RFB No. 1,158 of 24 May 2011. WT/TPR/S/283 • Brazil 
 
- 47 - 
 
  factors are regularly updated and include: the importer's fiscal compliance record; operational and 
financial capacity; frequency of use of the system; the nature, volume, and value of imports; taxation value; country of origin; and the import regime. The share of import declarations processed through the green channel increased during 2010-12 (Table 3.1). A "blue line" express 
clearance facility remains in place for authorized companies with regular foreign trade 
operations.
12  
Table 3.1 Distribution of ID by fiscal examination channel, 2010-12 
Channel 2010  2011  2012  
Green 83.16  87.45  87.81  
Yellow 7.25 6.87 7.11 
Red 9.55  5.63 5.07 
Grey 0.04 0.05 0.01 
Source: Secretariat of Federal Revenue of Brazil. 
3.19.  Efforts to better combat fraudulent imports have seen the RFB's risk management division 
evolve into the National Centre for Customs Risk Management (CERAD), an inter-ministerial body 
which became operational in August 2012.13 Investigations of tax avoidance practices, including 
false declarations of origin, have been intensified.14 Brazil has also increased the number of goods 
subject to compulsory certification (section 3. 2.8) and taken steps to strengthen conformity 
assessment upon importation. A register of good s requiring conformity assessment, containing 
1,829 products, was created in 2011. In April 2012, the RFB and the National Institute of Metrology, Quality and Technology (INMETRO) sign ed a technical cooperation agreement aimed at 
reinforcing the control of imported goods' compliance with Brazilian technical regulations.
15 The 
agreement stipulates that the RFB may call upon INMETRO to perform conformity assessments 
during customs clearance of imports; the two entities will also collaborate to better assess the value of imports and improve the selection mechanism for physical inspections.
16  
3.20.  A simplified import declaration (SID) may be used for certain shipments whose value does 
not exceed US$3,000 and for some non-commercial imports.17 The SID may be processed through 
SISCOMEX or submitted in hard copy to the relevant customs unit; submission is free of charge. 
3.21.  Airborne expedited shipments (documents and goods whose value does not exceed 
US$3,000) transported by door-to-door delivery companies require a DIRE express shipment declaration ( Declaração de Importação de Remessas Expressas ), which must be registered in the 
system for Computerized Control of Expedited Shipments (REMESSA). The courier company, rather 
than the importer, is responsible for customs procedures. Commercial imports declared with a 
DIRE are subject to a Simplified Tax Regime ( Regime de Tributação Simplificada ) and are taxed 
at 60% of their customs value, regardless of the tariff line under which they are classified; books, 
newspapers, and magazines are tax-exempt.  
3.22.  In February 2012, Brazil implemented a uni fied taxation regime (RTU) allowing for the 
simplified customs clearance of certain goods imported from Paraguay by Brazilian micro-
companies (with annual revenues up to R$120,000) and transported by authorized vehicles and 
drivers.
18 The regime requires both the importer and the Paraguayan seller to be authorized and 
                                               
12 WTO document WT/TPR/S/212/Rev.1 of 11 May 2009. 
13 CERAD’s mission is to facilitate legitimate trade th rough coordination of risk analysis techniques in 
customs control. 
14 Plano Brasil Maior  online information. Viewed at: http://www.brasilmaior.mdic.gov.br/images/data/ 
201208/ad9d7ee47c236ba9ee8fda7bb27501d7.pdf. 
15 RFB online information. Viewed at: http://www.receita.fazenda.gov.br/automaticoSRFSinot/2012/ 
04/11/2012_04_11_18_03_43_691163988.html. 
16 Plano Brasil Maior online information. Viewed at: http://www.brasilmaior.mdic.gov.br/images/data/ 
201211/2f197bbf4dfd7e05c57703fd75673ec2.pdf. 
17 Eligible goods include: samples with no commercial value; books and publications imported for non-
commercial purposes; goods (valued up to US$500) and prescription medicines imported by an individual for non-commercial purposes; temporarily admitted vehicles of foreign resident s; imports by dipl omatic missions; 
human organs and tissues for transp lantation; domestic animals import ed for non-commercial purposes; 
donations and goods admitted temporarily for humanitarian aid purposes; goods of a cultural nature; goods 
(valued up to US$500) imported by a public administration entity; and goods returned to Brazil. 
18 Law No. 11,898 of 8 January 2009 and Decree No. 6,956 of 9 September 2009. WT/TPR/S/283 • Brazil 
 
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  registered in a computerized system ( Sistema RTU ) maintained by the RFB.19 Eligible imports 
comprise mainly consumer electronics (some 250 items under NCM tariff chapters 84, 85, and 90), subject to annual and quarterly value limits.
20 Under the RTU, the cumulative rate of the import 
duty, the excise duty ( imposto sobre produtos industrializados ), and PIS and COFINS contributions 
is 25%; it is applied on the goods' purchase price, as per the commercial invoice. The authorities 
indicate that only 45 import declarations were made under the RTU in its first year of operation. 
3.23.  The 2013 World Bank Doing Business  survey reports that the overall time to import 
merchandise into Brazil (17 days) has not changed over the past three years, after having 
decreased from 19 days in 2009 to 16 days in 2010. However, the corresponding cost per container was estimated to have almost doubled over 2009-13, reaching US$2,275.
21 According to 
the authorities, the average time for custom s clearance was 41 hours in 2011 and 53.5 hours 
in 2012; the increase is partly attributable to Brazil's congested sea ports, and strikes by public 
sector workers. In 2012, 87.8% of goods cleared through customs went through the green channel, 7.1% through the yellow channel, and 5. 1% through the red channel; less than 0.1% of 
the goods went through the grey channel. 
3.24.  Customs administration decisions may be appealed in the first instance to the Federal 
Revenue Courts of the Ministry of Finance, and to the Taxpayers' Council in the second instance. 
The authorities noted that dispute settlement pr ocedures have not changed since Brazil's last 
Review and may now be carried out entirely by electronic means. 
3.25.  Brazil has customs cooperation agreements with Angola, Argentina, Bolivia, Cape Verde, 
Chile, Colombia, Costa Rica, Cuba, the Dominican Republic, East Timor, Ecuador, El Salvador, 
Guinea-Bissau, Haiti, Honduras, Mexico, Mozambique, Nicaragua, Panama, Paraguay, Peru, 
Portugal, São Tomé and Príncipe, Spain, Uruguay, the United States, and Venezuela. Additionally, 
Brazil has bilateral agreements on customs issues with France, India, Israel, the Netherlands, 
Russia, South Africa, the United Kingdom, and the United States of America.  
3.2.2  Customs valuation and rules of origin 3.26.  Brazil applies the WTO Customs Valuation Agreement (CVA), with reservations on: (i) the 
inversion of the order of application of the methods stipulated in Articles 5 and 6; and (ii) the use 
of the unit price of the greatest aggregate quantity  sold, foreseen in Article 5, paragraph 2. In 
such cases, procedures set out in the respective  interpretative note prevail, regardless of the 
importer's request. Brazil has applied the Decision  on the Treatment of Interest Charges in the 
Customs Value of Imported Goods and the Decision on the Valuation of Carrier Media Bearing 
Software for Data Processing Equipment since 1 March 1998.
22 
3.27.  The transaction value of the imported goods was used for valuation for some 99.8% of all 
imports cleared during 2009-12. When necessary, recourse to alternative methods follows the 
hierarchy set out in the CVA. The authorities affirm that Brazil does not use minimum or reference prices to determine the customs value of imported goods.  
3.28.  Brazil enacted legal provisions establishing non-preferential rules of origin 
in December 2011.
23 To be considered as originating, products must be wholly obtained or have 
undergone substantial transformation (becoming classifiable under a different four-digit tariff heading) in the declared country of origin. Verifica tions of non-preferential origin are carried out by 
the SECEX at the import licensing stage, as well as by the RFB during customs clearance and post-
clearance audits. False declarations of origin may trigger rejection of an import licence application and refusal to grant such licences for similar good s traced to the same exporter. At the point of 
entry, non-originating goods are liable to a fine of 30% of their c.i.f. value; those subject to a 
                                               
19 The authorization requirements are set out in RFB Ordinance No. 1,245 of 30 January 2012. 
20 The value of imports under the RTU may not exceed R$110,000 per year; quarterly maximum 
thresholds of R$18,000 (1st and 2nd) and R$37,000 (3rd and 4th) also apply. For the list of eligible goods, see:  
http://www.receita.fazenda.gov.br/publico/Aduana/RTU/AnexoUnicoDecreto6956_2009.doc. 
21 Data in Doing Business 2013  are current as of 1 June 2012. For Brazil's country profile, as well as 
notes on the methodology and its limitations, see: http://doingbusiness.org/~/media/giawb/doing 
business/documents/profiles/country/BRA.pdf. 
22 WTO document G/VAL/N/3/BRA/1 of 23 October 2002. 
23 WTO document G/RO/N/78 of 16 April 2012. WT/TPR/S/283 • Brazil 
 
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  quantitative restriction will not be admitted into th e customs territory and will be liable to a fine 
of R$5,000 per day, counted from the date of regist ration of the import declaration until the date 
of their effective return abroad. 
3.29.  Brazil applies preferential rules of origin in the context of its trade agreements (Chapter 2). 
Not all of these agreements have been notified to the WTO.24 Brazil's preferential agreements with 
Andean countries have rules for cross-cumulation. 
3.30.  Most changes made to MERCOSUR rules of origin during the review period were 
adjustments for new versions of the Harmonized System. In general, MERCOSUR origin is 
conferred on products that: (i) are wholly obtain ed or produced in MERCOSUR; (ii) have become 
classifiable under a different four-digit tariff heading; or (iii) have minimum regional content of 60% of their f.o.b. value. Specific rules apply to, inter alia , foodstuffs, pharmaceuticals, textiles, 
steel, telecommunications, and informatics products. MERCOSUR rules of origin may be applied to 
all intra-MERCOSUR trade up to 31 December 2016.
25  
3.31.  LAIA agreements also stipulate general and specific rules of origin.26 Under general LAIA 
rules, origin is conferred to products that either: (i) are wholly obtained or produced in the 
territory of one of the signatory parties; (ii) have become classifiable under a different tariff heading; or (iii) contain third-country inputs whose c.i.f. value does not exceed 50% (60% for 
relatively less developed countries) of the f.o.b. value of the final product.
27  
3.32.  In Brazil, certificates of compliance with pr eferential rules of origin are issued by private 
institutions accredited by the SECEX.28  As from 30 November 2011, all such institutions must 
have a computerized system for processing documentation online, in compliance with the 
parameters established by LAIA's Digital Certification of Origin Project (COD).29 In March 2013, 
some 57 entities had SECEX authorization to issue certificates of origin. Certificates of origin for imports are valid for 180 days, and must be issued within 60 days of issuance of the commercial 
invoice in the case of LAIA and MERCOSUR countries. The request for a certificate of origin must 
be accompanied by the commercial invoice and a declaration by the producer. Brazil is working with its LAIA partners towards establishing an electronic interface linking customs declarations 
with certificates of origin. 
3.2.3  Tariffs 3.2.3.1  Applied MFN tariff 3.33.  Brazil applies the MERCOSUR Common External Tariff (CET) expressed in the Common 
MERCOSUR Nomenclature (NCM), which is based on the Harmonized System (HS). Changes to the 
CET and an update of the NCM to HS 2012 entered into effect on 1 January 2012.
30 Brazil grants 
at least most-favoured-nation (MFN) status to all its trading partners. 
3.34.  Brazil's 2012 applied MFN customs tariff is entirely ad valorem  and comprises 10,031 lines 
at the eight-digit level (Table 3.2); it contains no seasonal or variable import duties. The simple average applied MFN tariff was 11.7% in 2012, up from 11.5% in 2008; for dutiable lines, the 
corresponding averages were 12.7% and 12.5%. The increase is due to both the change in 
classification and temporary derogations from the CET (see below). The coefficient of variation of 0.7 indicates moderate tariff dispersion (Table 3.3), with ad valorem  rates ranging from zero to 
55%. Some 8% of tariff lines are duty free (down from 8.3% in 2008), the modal tariff range is 
10-15%, and 8.4% of the total lines carry rate s of over 25% (Chart 3.1). The manufacturing 
sector (ISIC definition) benefits from the highest tariff protection, with an average applied tariff 
                                               
24 The list of trade agreements notified to the WTO can be viewed at: http://www.wto.org/english/ 
tratop_e/region_e/rta_pa rticipation_map_e.htm. 
25 Common Market Council Decision No. 44/10 of 16 December 2010. 
26 For the rules of origin for LAIA agreements to whic h Brazil is a party, see LAIA online information. 
Viewed at: http://www.aladi.org/nsfaladi/r%C3%A9gorigtext.nsf/vpaises/ brasil. 
27 LAIA Resolution No. 252 of 4 August 1999. Viewed at: http://www.aladi.org/nsfaladi/juridica.nsf/vres 
252web/res252. 
28 These private institutions are not authorized to issue certificates of origin for poultry meat and sugar 
exported to the EU and for pr oducts under GSP treatment. 
29 SECEX Ordinance No. 23 of 14 July 2011. 
30 CAMEX Resolution No. 94 of 8 December 2011. WT/TPR/S/283 • Brazil 
 
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  of 12% (up from 11.8% in 2008) and the highes t frequency of duties in the 10-55% range 
(Chart 3.2). 
Table 3.2 Structure of the MF N tariff schedule, 2008 and 2012 
 2008 2012  
Total number of tariff lines 9,765 10,031  
Non-ad valorem  tariffs (% of all tariff lines) 0.0 0.0 
Lines subject to tariff quotas (%  of all tariff lines) 0.1 0.3  
Duty-free tariff lines (% of all tariff lines) 8.3 8.0 
Average tariff on dutiable lines (%) 12.5 12.7  
Simple average tariff (%) 11.5 11.7 
 WTO agriculture 10.1 10.2  
 WTO non-agriculture (incl. petroleum) 11.6 11.9 
 Agriculture, hunting, forestry and fishing (ISIC 1) 7.1 7.2  
 Mining and quarrying (ISIC 2) 3.1 3.1 
 Manufacturing (ISIC 3) 11.8 12.0  
 First stage of processing 6.9 7.0 
 Semi-processed products 9.3 9.6  
 Fully processed products 13.9 14.1 
Domestic tariff "peaks" (% of all tariff lines)a 4.3 0.0  
International tariff "peaks" (% of all tariff lines)b 26.3 27.7 
Overall standard deviation 8.0 8.5  
Bound tariff lines (% of all tariff lines) 100.0 100.0  
a Domestic tariff peaks are defined as those exc eeding three times the overall average applied rate. 
There were only two such peaks in 2012, as temporary rate increases on some 100 lines raised the 
overall average. 
b International tariff peaks are defined as those exceeding 15%. 
Source: WTO Secretariat calculations, based on data provided by the Brazilian authorities. 
Table 3.3 Summary analysis of Brazil's MFN tariff, 2012 
Description MFN Final 
bound 
averagea 
(%) No. of 
Lines Average 
(%) Range 
(%) Variation 
(CV) 
Total 10,031 11.7 0 - 55 0.7 30.1 
HS 01-24 1,252 10.3 0 - 55 0.5 35.7 
HS 25-97 8,779 11.9 0 - 35 0.7 29.3 
By WTO category      
WTO Agriculture 1,030 10.2 0 - 55 0.6 35.3 
 - Animals and products thereof 133 7.9 0 - 16 0.6 37.4 
 - Dairy products 37 18.6 12 - 28 0.3 48.6 
 - Fruit, vegetables and plants 271 9.6 0 - 55 0.6 34.3 
 - Coffee and tea 30 13.7 10 - 20 0.3 33.6 
 - Cereals and preparations 138 11.6 0 - 20 0.5 40.4 
 - Oil seeds, fats and oils and their products 125 7.8 0 - 30 0.5 34.7 
 - Sugars and confectionary 23 16.7 16 - 20 0.1 34.6 
 - Beverages, spirits and tobacco 67 16.5 0 - 27 0.3 37.6 
 - Cotton 7 7.4 6 - 10 0.2 55.0 
 - Other agricultural  products n.e.s. 199 8.0 0 - 20 0.6 28.7 
WTO Non-agriculture (including petroleum) 9,001 11.9 0 - 35 0.7 29.4 
 - WTO non-agriculture (excluding petroleum) 8,974 11.9 0 - 35 0.7 29.4 
 - - Fish and fishery products 331 10.1 0 - 32 0.3 33.3 
 - - Minerals and metals 1,217 10.2 0 - 35 0.6 32.4 
 - - Chemicals and photographic supplies 3,145 7.2 0 - 25 0.8 23.8 
 - - Wood, pulp, paper and furniture 375 10.9 0 - 25 0.5 28.2 
 - - Textiles 790 22.7 2 - 35 0.3 34.6 
 - - Clothing 251 35.0 35 - 35 0.0 35.0 
 - - Leather, rubber, f ootwear and travel goods 242 15.2 0 - 35 0.6 34.4 
 - - Non-electric machinery 1,132 11.7 0 - 35 0.5 31.7 
 - - Electric machinery 609 12.2 0 - 25 0.6 30.8 
 - - Transport equipment 202 18.8 0 - 35 0.6 32.6 
 - - Non-agriculture articles n.e.s. 680 13.9 0 - 35 0.5 31.4 WT/TPR/S/283 • Brazil 
 
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  Description MFN Final 
bound 
averagea 
(%) No. of 
Lines Average 
(%) Range 
(%) Variation 
(CV) 
 - Petroleum 27 1.1 0 - 25 4.2 35.0 
By ISIC sectorb      
Agriculture and fisheries 498 7.2 0 - 35 0.6 33.3 
Mining 126 3.1 0 - 10 0.6 33.7 
Manufacturing 9,406 12.0 0 - 55 0.7 29.8 
By HS section      
 01 Live animals and products 481 9.3 0 - 28 0.5 35.5 
 02 Vegetable products 399 7.9 0 - 35 0.6 35.5 
 03 Fats and oils 74 9.8 4 - 30 0.3 34.5 
 04 Prepared food, etc. 298 15.2 0 - 55 0.4 36.7 
 05 Minerals 206 2.5 0 - 25 1.0 34.1 
 06 Chemical and prod. 2,961 6.8 0 - 20 0.8 23.8 
 07 Plastics and rubber 425 11.7 0 - 35 0.6 25.5 
 08 Hides and skins 113 11.5 2 - 35 0.6 34.5 
 09 Wood and articles 130 8.3 2 - 14 0.5 20.6 
 10 Pulp, paper etc. 221 11.5 0 - 25 0.5 31.0 
 11 Textile and articles 1,013 25.6 2 - 35 0.3 34.8 
 12 Footwear, headgear 70 25.6 16 - 35 0.3 35.0 
 13 Articles of stone 216 11.2 0 - 35 0.5 34.7 
 14 Precious stones, etc. 64 9.5 0 - 18 0.7 35.0 
 15 Base metals and products 739 12.2 0 - 25 0.4 32.6 
 16 Machinery 1,769 11.9 0 - 35 0.5 31.4 
 17 Transport equipment 215 18.3 0 - 35 0.6 32.4 
 18 Precision equipment 451 12.4 0 - 20 0.6 30.4 
 19 Arms and ammunition 18 20.0 20 - 20 0.0 34.1 
 20 Miscellaneous manufactures 161 19.2 0 - 35 0.3 33.8 
 21 Works of art, etc. 7 4.0 4 - 4 0.0 35.0 
By stage of processing      
First stage of processing 1,012 7.0 0 - 35 0.7 33.6 
Semi-processed products 3,776 9.6 0 - 35 0.8 26.1 
Fully-processed products 5,243 14.1 0 - 55 0.6 32.1 
a Bound and applied rates are expressed in HS2002 and HS2012, respectively; therefore there may be 
a difference between the number of lines included in the calculation. 
b ISIC (Rev.2) classification, excluding electricity (1 line). 
Source: WTO Secretariat estimates, based on data provided by the Brazilian authorities. 
 
Chart 3.1 Frequency distribution of MFN tariff rates, 2012 
(7.9%)(20.4%)
(16.0%)(28.0%)
(18.7%)
(0.6%)(8.4%)
0102030405060708090100
05001,0001,5002,0002,5003,000
Duty free >0-5 >5-10 >10-15 >15-20 >20-25 >25Number of tariff linesaPer cent
Cumulative %
Number of lines (% of total)
 
 
a The total number of ad valorem lines is 10,031. 
Source: WTO Secretariat calculations, based on data provided by the authorities of Brazil. WT/TPR/S/283 • Brazil 
 
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Chart 3.2 Distribution of the MFN tariff by ISIC sectora, 2012 
Duty free>0-5>5-10>10-15>15-20>2005001,0001,5002,0002,5003,000
All products
Manufactures
Mining
AgricultureNumber of lines
9.67.920.4
16.028.0
7.519.9
13.529.6
0.013.581.8
4.8
0.015.7
14.565.3
4.2
0.29.0
0.20.020.018.7
 
a Labels correspond to the share of total number of tariff lines by ISIC sector. 
Source: WTO Secretariat estimates, based on data provided by the authorities of Brazil. 
3.35.  In aggregate, the tariff continues to depict positive escalation: fully processed products 
attract the highest average applied rate, follow ed by semi-processed goods and raw materials. 
This pattern of escalation tends to act as a disincentive to improve international competitiveness at 
the higher stages of value addition.  
3.36.  In line with MERCOSUR rules, Brazil maintains a range of temporary, unilateral exemptions 
to the CET; the scope for such derogations was increased with the adoption of a new MERCOSUR 
mechanism, providing for temporary tariff increases on non-originating goods, 
in December 2011.31 The derogation's stated intent is to address trade imbalances due to the 
international economic environment. Member states must file a request with MERCOSUR's 
Secretariat, justifying each proposed tariff hike ; in case of an objection from another member 
State, the matter is settled by MERCOSUR's  Commerce Commission. The mechanism, which 
entered into force on 6 September 2012, caps the applicable time-frame to 12 months (renewable 
for up to 12 additional months) and the number of admissible (8-digit) tariff lines to 100 per 
member State. Taking advantage of this mechanis m, Brazil raised the rates applied on 100 tariff 
lines (the authorized maximum) for a 12-month period, effective 1 October 2012.32 As a result of 
these hikes, which range from 6 to 23 percentage points, the simple average rate on these lines 
increased from 13.5% to 22.2%. As at March 2013, a  MERCOSUR Decision to increase the number 
of tariff lines to 200 was pending incorporation into the national legislation of member states, a prerequisite for its entry into force.
33  
3.37.  Brazil has also continued to derogate fr om the CET under the three MERCOSUR mechanisms 
already in place at the time of its previous Review.34 The deadline for elimination of its basic list of 
national exemptions, allowing individually applied tariffs on up to 100 lines to be higher or lower 
than the CET, has been extended until 31 December 2015.35 Up to 20% of the lines on that list 
may be altered within a six-month period. 
                                               
31 Common Market Council Decision No. 39/11 of 20 December 2012. 
32 CAMEX Resolution No. 70/12 of 28 September 2012. 
33 Common Market Council Decision No. 25/12 of 29 June 2012. 
34 These instruments are: the basic list of national  exemptions, the quotas for lower tariffs, and the Ex 
Tarifário  mechanism (WTO document WT/TPR/S/212/Rev.1 of 11 May 2009). 
35 Common Market Council Decision No. 58/10 of 16 December 2010. WT/TPR/S/283 • Brazil 
 
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  3.38.  Under the Ex Tarifário  mechanism, Brazil has been authorized to maintain its lists of capital 
goods (BK list) and IT and telecommunications eq uipment (BIT list) until end-2013 and end-2015, 
respectively.36 This mechanism allows MERCOSUR members to individually reduce import duties, 
for up to two years, on pre-determined BK and BI T lists of goods without a domestically produced 
equivalent; rates are normally reduced to 2%, or 0% in a few cases.37 In August 2011, Brazil 
redefined the eligibility criteria for goods on its BK and BIT lists to exclude used items.38 
In April 2012, a new CAMEX Resolution also excluded re-manufactured or refurbished items and 
integrated systems; besides the lack of equivalent domestic production, decisions on the granting 
of import duty reductions are linked to considerations, such as adoption of new technologies, investment in infrastructure improvements, and domestic equipment content in the overall project.
39  
3.39.  Brazil has also applied temporary tariff reductions coupled with import quotas under the 
mechanism aimed at addressing shortages within MERCOSUR.40 MERCOSUR members are allowed, 
individually, to lower the CET rate to 2% (exceptionally, to 0%) on up to 30 tariff lines at a time; 
the reduction may last for up to 24 months (renewable for up to 12 additional months).41 The 
lower applied rate, its duration and associated quantitative restriction are determined by MERCOSUR's Commerce Commission after consultation with all member states. In 2011, Brazil 
a p p l i e d  l o w e r - t h a n - C E T  r a t e s ,  m o s t l y  a t  2 % ,  i n  t h e  f o r m  o f  t a r i f f  q u o t a s  o n  2 5  t a r i f f  l i n e s ;  a l l  
quotas were filled.  
3.2.3.2  Bindings 3.40.  Brazil bound its entire tariff during the Uruguay Round. Tariffs on agricultural products 
(WTO definition) are bound at rates between 0%  and 55%, with dairy products, grains, and 
tobacco at the upper end of that range. Bound rates for non-agricultural products range from 0% to 35%. The average bound tariff rate is 30.1%, whereas the average applied MFN rate is 
11.7%.
42 Brazil has bound "other duties and charges" for only one line, covering certain 
navigational instruments (HS 9014.80.0400 at 15%)43; this duty is not applied in practice. 
3.41.  The WTO process of certifying Brazil's bound tariff schedule in order to incorporate the 
changes resulting from the introduction of HS version 2012 has not been completed. Some 
120 CET lines exceed, sometimes partially (due to differences in aggregation levels), Brazil's bindings; the authorities note that in all such cases importers may request application of the bound rate. 
3.2.3.3  Preferences 
3.42.  Brazil grants tariff preferences in the cont ext of its bilateral and regional trade agreements 
(Chapter 2.5); no correspondence tables to HS version 2012 have been formally adopted. Some of 
these agreements overlap in terms of trading part ners, but differ in terms of product coverage and 
rules of origin. Product coverage is also quite limited under certain agreements. The authorities noted that importers are usually aware of their products' tariff classification and preference 
eligibility, and claim the appropriate treatment. Wh ile the simple average MFN tariff rate is 11.7%, 
simple average rates for Brazil's preferential partners range from 6.8% (Peru) to 11.6% (Guyana and India) (Table 3.4). 
                                               
36 After the respective deadlines, the national lists should be replaced by a uniform MERCOSUR regime 
for the importation of these goods (Common Market  Council Decision No. 57/10 of 16 December 2010). 
37 In March 2013, Brazil's BK and BIT lists contained 1,205 and 401 tariff lines, respectively. 
38 CAMEX Resolution No. 55 of 9 August 2011. 
39 CAMEX Resolution No. 17 of 3 April 2012. 
40 MERCOSUR Resolution GMC No. 08/08 of 20 June 2008, replacing Resolution GMC No. 69 of 
12 July 2000. 
41 In cases where it is impossible to ensure normal  regional supply, the maxi mum number of tariff lines 
is set at 15 and the maximum period at 12 months  (renewable for up to 12 additional months). 
42 Tariff bindings are provided in HS2002 classification, whereas the MFN 2012 tariff schedule is 
expressed in the HS2012.  Therefore, these two averages are not strictly comparable. 
43 The authorities noted that the former HS code 9014.80.0400 corresponds to HS codes 9014.80.10 
and 9014.80.90 in the current MERCOSUR nomenclature. WT/TPR/S/283 • Brazil 
 
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Table 3.4 Summary analysis of tariffs a ccording to preferential agreements, 2012 
 
No. of 
lines MFN GUY CHI BOL Mexico PER COL ECU VEN CUB IND ISR 
Total 10,031 11.7 11.6 7.1  6.9 11.4 11.5 6.8 7.6 6.9 7.3 9.6 11.6  8.1 
HS 01-24 1,252 10.3 10.0 6.3 6.1 9.8 10.3 6.2 6.4 6.4 6.3 8.6 10.3 7.0 
HS 25-97 8,779 11.9 11.9 7.2  7.0 11.6 11.7 6.9 7.8 7.0 7.4 9.7 11.8  8.3 
By WTO category               
WTO Agriculture 1,030 10.2 9.8 5.3  5.2 9.6 10.2 5.2 5.4 5.4 5.3 8.4 10.1  6.0 
- Animals & 
 products 
 hereof 133 7.9 7.7 3.8 3.8 7.9 7.9 3.8 4.2 4.4 4.1 7.0 7.9 5.4 
- Dairy products 37 18.6 18.6 11.4  11.4 18.6 18.6 11.4 12.5 14.0 12.5 18.6 18.5  8.9 
- Fruit, 
vegetables & 
plants 271 9.6 8.8 4.4 4.1 8.9 9.6 4.1 4.1 4.1 4.1 8.9 9.6 6.7 
- Coffee & tea 30 13.7 13.3 5.0  4.7 13.7 13.7 4.7 5.6 4.7 4.7 6.1 13.6  6.7 
- Cereals & 
preparations 138 11.6 11.4 7.0 6.7 10.0 11.6 6.7 6.9 6.7 6.7 7.6 11.5 5.9 
- Oil seeds, fats 
& oils & their Products 125 7.8 7.7 4.3
 4.3 7.8 7.8 4.3 4.3 4.3 4.3 7.6 7.8  4.3 
- Sugars & 
confectionary 23 16.7 16.7 5.9 4.7 15.0 16.7 7.0 11.5 9.7 7.7 12.2 16.7 7.3 
- Beverages, 
spirits & 
tobacco 67 16.5 16.2 11.0  10.6 15.4 16.5 10.6 10.6 10.6 10.6 9.8 16.5  9.9 
- Cotton 7 7.4 7.4 4.3 3.7 7.4 7.4 3.7 3.7 3.7 3.7 7.4 7.4 2.4 
- Other 
agricultural products 
n.e.s. 199 8.0 7.8 4.1
 4.1 7.6 8.0 4.1 4.2 4.1 4.1 7.4 8.0  4.7 
WTO Non-
agriculture (incl. 
petroleum) 9,001 11.8 11.8 7.3 7.1 11.6 11.7 7.0 7.9 7.1 7.5 9.7 11.8 8.4 
- WTO Non-
agriculture 
(excl. 
petroleum) 8,974 11.9 11.9 7.3  7.1 11.7 11.7 7.0 7.9 7.1 7.5 9.7 11.9  8.4 
- - Fish and 
fishery 
products 331 10.1 10.1 8.4 8.4 10.1 10.1 8.4 8.4 8.4 8.4 8.7 10.1 9.0 
- - Minerals and 
metals 1,217 10.2 10.1 4.4  4.4 10.0 10.0 4.4 4.7 4.8 4.4 7.9 10.1  6.6 
- - Chemicals 
and 
photographic 
supplies 3,145 7.1 7.1 5.6 5.6 6.9 7.1 5.6 5.6 5.6 5.6 5.9 7.1 4.4 
- - Wood, pulp, 
paper and 
furniture 375 10.9 10.6 7.0  6.6 10.9 10.8 6.5 6.5 6.5 6.5 7.6 10.9  7.5 
- - Textiles 790 22.7 22.7 10.1 9.6 22.6 22.7 9.4 14.5 9.4 10.3 20.0 22.7 17.2 
- - Clothing 251 35.0 35.0 14.9  10.0 34.6 35.0 9.5 21.6 9.5 22.2 29.2 35.0  28.8 
- - Leather, 
rubber, 
footwear 
and travel 
goods 242 15.2 15.2 9.8 9.8 15.2 14.9 9.2 9.2 9.3 9.2 14.3 15.1 11.0 
- - Non-electric 
machinery 1,132 11.7 11.7 8.3  8.3 11.3 11.4 8.2 8.2 8.2 8.2 8.7 11.7  8.0 
- - Electric 
machinery 609 12.2 12.2 9.5 9.9 12.0 11.5 9.4 9.5 9.5 9.4 10.8 12.2 9.0 
- - Transport 
equipment 202 18.8 18.8 12.9  13.4 18.3 17.7 12.0 13.2 13.5 13.2 17.5 18.8  15.8 
- - Non-
agriculture 
articles 
n.e.s. 680 13.9 13.9 8.3 8.3 13.6 13.7 8.3 8.3 8.3 8.3 10.3 13.9 9.2 
- Petroleum 27 1.1 1.1 1.1  1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1 1.1  0.3 
By ISIC sectora              
Agriculture and 
fisheries 498 7.2 6.7 4.6  4.6 7.1 7.2 4.6 4.6 4.6 4.6 6.4 7.2  5.4 
Mining 126 3.1 3.1 1.2 1.2 2.8 3.1 1.2 1.2 1.2 1.2 2.7 3.1 0.9 
Manufacturing 9,406 12.0 12.0 7.3  7.1 11.8 11.9 7.0 7.9 7.2 7.5 9.8 12.0  8.4 
By HS section               
01 Live animals 
and prod. 481 9.3 9.3 6.8  6.8 9.3 9.3 6.8 7.0 7.1 6.9 8.5 9.3  7.2 
02 Vegetable 
products 399 7.9 7.1 4.1 4.0 7.5 7.9 4.0 4.0 4.0 4.0 7.5 7.8 5.4 
03 Fats and oils 74 9.7 9.7 5.7  5.7 9.6 9.7 5.7 5.7 5.7 5.7 9.5 9.7  6.0 WT/TPR/S/283 • Brazil 
 
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No. of 
lines MFN GUY CHI BOL Mexico PER COL ECU VEN CUB IND ISR 
04 Prepared 
food etc. 298 15.2 15.2 8.5 8.0 13.9 15.2 8.1 8.7 8.4 8.3 9.8 15.2 8.8 
05 Minerals 206 2.5 2.4 1.1  1.1 2.3 2.5 1.1 1.1 1.1 1.1 2.0 2.5  0.7 
06 Chemical 
and prod. 2,961 6.8 6.8 5.2 5.2 6.5 6.8 5.2 5.2 5.2 5.2 5.4 6.7 4.1 
07 Plastics and 
rubber 425 11.7 11.7 7.9  7.9 11.4 11.5 7.8 7.8 8.1 8.0 11.1 11.7  7.8 
08 Hides and 
skins 113 11.5 11.5 7.4 7.4 11.5 11.5 7.4 7.4 7.5 7.5 11.1 11.5 7.5 
09 Wood and 
articles 130 8.3 7.6 5.7  5.5 8.3 8.3 5.5 5.5 5.5 5.5 7.6 8.3  6.1 
10 Pulp, paper 
etc. 221 11.5 11.3 7.9 7.5 11.4 11.4 7.3 7.3 7.4 7.4 7.4 11.4 7.7 
11 Textile and 
articles 1,013 25.6 25.6 11.0  9.4 25.4 25.6 9.1 16.1 9.1 13.0 22.1 25.6  19.9 
12 Footwear, 
headgear 70 25.6 25.6 16.2 16.0 25.6 25.6 14.2 14.2 14.2 14.2 22.5 25.6 22.0 
13 Articles of 
stone 216 11.2 11.2 6.4  6.4 10.8 11.0 6.4 6.4 6.4 6.4 9.2 11.2  7.4 
14 Precious 
stones, etc. 64 9.5 9.5 2.8 2.8 9.3 9.5 2.8 2.8 2.8 2.8 6.8 9.4 5.7 
15 Base metals 
and prod. 739 12.2 12.1 4.8  4.8 12.1 12.0 4.8 5.3 5.5 4.9 9.4 12.2  8.3 
16 Machinery 1,769 11.9 11.9 8.9 9.0 11.6 11.5 8.8 8.8 8.8 8.8 9.5 11.9 8.4 
17 Transport 
equipment 215 18.3 18.3 12.3  12.8 17.8 17.1 11.5 12.6 12.9 12.6 17.0 18.3  15.2 
18 Precision 
equipment 451 12.4 12.4 8.4 8.4 12.2 12.2 8.4 8.4 8.4 8.4 8.8 12.4 7.2 
19 Arms and 
ammunition 18 20.0 20.0 6.7  6.7 20.0 20.0 6.7 6.7 6.7 6.7 20.0 20.0  11.8 
20 
Miscellaneous 
manufacturing 161 19.2 19.2 8.0 7.6 18.1 18.6 7.5 7.5 7.6 7.5 12.8 19.2 14.2 
21 Works of art, 
etc. 7 4.0 4.0 0.0  0.0 4.0 4.0 0.0 0.0 0.0 0.0 0.9 4.0  1.0 
By stage of processing               
First stage of 
processing 1,012 7.0 6.7 4.3  4.3 6.8 7.0 4.3 4.4 4.3 4.3 6.3 7.0  5.0 
Semi-processed 
products 3,776 9.6 9.5 5.9 5.8 9.4 9.6 5.8 6.6 5.9 5.8 8.4 9.5 6.3 
Fully-processed 
products 5,243 14.1 14.1 8.5  8.3 13.8 13.8 8.1 9.0 8.2 8.9 11.0 14.1  10.0 
a ISIC (Rev.2) classification, excluding electricity (1 line). 
Source: WTO Secretariat estimates, based on data provided by the Brazilian authorities. 
3.43.  Some of Brazil's free-trade agreements envisage preferential quotas. In 2012, ten such 
quotas were in place under two economic complementarity agreements: MERCOSUR-Andean 
Countries (ACE No. 59)44 and Brazil-Mexico (ACE No. 53). Th e Brazil-Mexico agreement covering 
the automotive industry (ACE No. 55) was revi sed in 2012 to implement quotas, which may be 
applied for up to three years. 
3.2.4  Other charges affecting imports 
3.44.  Imports are subject to various internal taxes: Tax on Industrial Products (IPI); Tax on the 
Circulation of Goods and Services (ICMS); contribu tions to the social integration programme (PIS) 
and to finance social security (COFINS); and Tax on Services (ISS). The application of these taxes 
may vary depending on the product type, the competent sub-federal authority, and the importer's 
tax regime status, thus rendering Br azil's tax system very complex. 
3.45.  A non- ad valorem  Contribution for Intervention in the Economic Domain (CIDE) is levied on 
the importation and commercialization of petroleum and natural gas, their derivatives, and ethanol 
(Chapter 4). Other charges related to import transa ctions include the Additional Freight Charge for 
the Renovation of the Merchant Navy (AFRMM), the Additional Airport Tax (ATAERO) (see 
Chapter 4), and the Financial Transaction Tax (IOF) (Chapter 1). 
                                               
44 Brazilian imports under preferential quotas und er the Economic Complementarity Agreement No. 59 
MERCOSUR/Andean Countries include trousers, bib and brace overalls, breeches and shorts of cotton (HS 
codes 6203.42.00 and 6204.62.00), and women's or girls' bl ouses, shirts and shirt-blouses of cotton (HS 
6206.30.00). The in-quota rate is 1.75% and the out-of-quota rate is 35%. WT/TPR/S/283 • Brazil 
 
- 56 - 
 
  3.46.  The IPI is a federal tax levied on domestically produced and imported manufactured goods, 
following the value-added principle.45 For domestic transactions, the tax is imposed when the 
product leaves the facility where it was manufactured46; typically, based on the ex-factory value. 
The IPI on imports is levied upon customs clearance and is based on the c.i.f. value plus the 
import duty and other applicable fees and foreign exchange charges. Most IPI rates are in the 0% 
to 20% range, but may be higher for certain products, such as perfumes (42%), alcoholic beverages (60%), or cigarettes (300%); in some ca ses, IPI rates are specific. In principle, the 
same rates apply on domestically produced and imported goods.  However, certain IPI reductions 
or suspensions, such as on automotive produc ts (Chapter 4.3), have been granted only to 
products originating in some of Brazil's preferential trading partners (e.g., MERCOSUR and Mexico).
47  
3.47.  The ICMS is a value-added tax48 levied by Brazil's federative states on imports (including of 
electricity), as well as on intrastate and interstate transactions involving merchandise, inter-municipal and interstate transportation services, and communication services. Taxable 
merchandise transactions are those involving a change of ownership, as well as transfers between 
a company's affiliates/branches, and importation (even for own use or consumption). The taxable base and the applicable ICMS rate depend on se veral factors, including the ship-from and ship-to 
tax jurisdiction, the purchaser's tax status, an d the product's type and intended use. Some 
companies, including those under federal and sub-fe deral (including municipal) ownership/control, 
are exempted from the ICMS. In addition, product- specific (permanent or temporary) exemptions 
may apply for all states or within a single State; reductions to the ICMS rate and/or tax base may 
be granted within a State (section 3.4.2).  
3.48.  In general, the ICMS is levied on the valu e of the transaction net of unconditional discounts. 
For merchandise this value includes the cost of in surance and freight and, in the case of imports, 
the import duties, the IOF and any other customs-related charges.
49 Moreover, for imports and 
goods for own use/consumption the taxable base is augmented by the IPI and the ICMS itself.50 
Typically, ICMS rates on interstate transactions  are either 7% or 12%, the former rate being 
applied when the purchaser is located in a poor state (those in the north, north-east and center-
west regions, and the state of Espírito Santo).51 Intrastate transactions and imports are subject to 
I C M S  r a t e s  a t  1 9 %  ( R i o  d e  J a n e i r o ) ,  1 8 %  ( S ã o  P a u l o ,  P a r a n á ,  a n d  M i n a s  G e r a i s ) ,  o r  1 7 %  ( a l l  remaining states); for imports, the applicable jurisdiction is determined by the location of the 
importing establishment/customs clearance. While states set ICMS rates independently, certain 
product groups are generally subject to rates of 7% (raw materials; parts and components for the 
data processing industry), 12% (processed edible goods from poultry and cattle; machinery, 
appliances and industrial equipment; agricult ural tractors and implements; etc.), or 25% 
(automobiles; cosmetics, alcohol and tobacco; co mmunications services; electricity; etc.).  
3.49.  The PIS and COFINS are charged on a no n-cumulative (value-added) basis for companies 
subject to the actual profit method of computing corporate income taxes.
52 In general, domestic 
and imported goods and services are subject to a combined rate of 9.25% (1.65% for PIS and 7.6% for COFINS). Higher cumulative rates apply to imports of machinery, motor vehicles and 
                                               
45 For IPI tax purposes, "manufacture" is defined as any process that modifies the nature, functioning, 
finishing, presentation or purpose of a product, or improves it  for consumption. The IPI tax paid on inputs used 
in manufacturing may be claimed as tax credit; this credit may be offset against IPI due on subsequent 
transactions or against other federal taxes. 
46 Each individual facility of a company is considered a separate taxpayer. 
47 The latest update of the IPI tax rates table dates from 23 December 2011 (Decree No. 7,660). RFB 
online information. Viewed at: http://www.recei ta.fazenda.gov.br/Aliquotas/TabIncidIPITIPI.htm. 
48 If the purchaser is not an ICMS taxpayer and subsequent sales are not subject to this tax, the ICMS 
paid on inputs is not recoverable as a credit. 
49 Depending on the State, these charges may or may not include: charges on air or maritime 
transportation, SISCOMEX usage fees, eventual anti-dum ping duties, and fees for port handling services. 
50 ICMS effective rate = (published ICMS rates) time s (nominal value of the good + nominal value of the 
tax) divided by (nominal value of the good). 
51 Subsequent compensation reflects ICMS rate differences between the ship-from and ship-to tax 
jurisdiction.   
52 Financial institutions, companies under the presumed profit tax regime, and certain revenues deriving 
from telecommunications, transport, and software developm ent services are not eligible for tax credits for the 
PIS and COFINS paid on inputs.  Companies with re venues subject to the cumulative system and other 
revenues subject to the non-cumulative system must ke ep separate records of their contributions under each 
system. WT/TPR/S/283 • Brazil 
 
- 57 - 
 
  their parts, rubber tyres and air chambers, pharma ceuticals, and cosmetic products. In addition, 
non-ad valorem  rates are levied on importation of soft drink and beer containers, and fuels. 
Provisions for zero-rating or exemption are in place for a wide range of goods. In the case of imported merchandise, the tax base is the c.i.f. value augmented by the ICMS, and the PIS and 
COFINS; for services, the base is the amount (before income tax) paid or remitted abroad plus the 
ISS and the PIS and COFINS.
53 For domestic goods and services transactions, these taxes are 
levied on the company's gross revenues. As part of tax reforms under the Plano Brasil Maior  
(section 3.4.2), the COFINS rate on imported goods falling under some 3,300 tariff lines has been 
increased by 1 to 2 percentage points. 
3.50.  The ISS is a municipal tax levied on revenue s derived from the provision of certain services 
( i n c l u d i n g  f r o m  a b r o a d ) .  T h e  r e l e v a n t  l i s t  o f  s e r v i c e s  a n d  t h e  m a x i m u m  t a x  r a t e  ( 5 %  o f  t h e  
transaction value) are fixed by a federal law54;  a  m i n i m u m  t a x  r a t e  o f  2 %  i s  s t i p u l a t e d  i n  t h e  
Constitution.55 In general, services subject to the ISS are exempted from the ICMS even if the 
service transaction also involves the sale of goods; in some cases, the legislation specifically 
provides for ICMS applicability on the value of the products sold. In principle, the service provider 
is liable for the ISS; however, municipal tax legislation may impose a withholding responsibility on the contracting entity that receives the service. 
3.2.5  Duty and tax exemptions and concessions 
3.51.  Brazil grants duty and tax reductions and exemptions under a variety of provisions aimed at 
promoting investment and innovation or achieving social objectives. Temporary derogations from the CET are applied on a range of capital good s, computer and telecommunications equipment, 
and goods in short supply on the do mestic market (section 3.2.2.1).
56 In addition, certain capital 
and consumer goods are eligible for temporary IPI reductions57; tax rebates, including on imported 
goods, may also be granted at the sub-federal level (section 3.4.1). Companies established in 
export processing zones (section 3.3.4) and the Manaus Free Trade Zone (section 3.4.2) may be 
exempted from IPI, ICMS, PIS and COFINS, and I SS on a range of imported goods and services. 
Furthermore, goods imported under the RTU sy stem are subject to special tax treatment 
(section 3.2.1). Revenue forgone due to tariff concessions reached an estimated R$10.9 billion 
(US$5.45 billion) over the 2009-12 period. In 2012 alon e, it was estimated at R$3.4 billion, or 
some 0.8% of the value of imports. 
3.52.  Provisions for total or partial tariff exemptions remain in place under several customs 
regimes, such as the Special System of Industrial  Depots subject to Standardized Control (RECOF) 
and the Drawback (section 3.3.4). In August 2011,  Brazil ratified the Convention on Temporary 
Admission (Istanbul Convention) maintaining a reservation on the possibility of refusal to accept 
the ATA Carnet for postal traffic.58 In general, imports may only be granted an exemption or a 
reduction of the customs duty if no similar domestic product is available; eligibility is assessed through a "similarity test", conducted by SECEX (section 3.2.5).  
3.2.6  Import prohibitions, restrictions, and licensing 
3.53.  By and large, Brazil maintains import prohibitions on health and moral grounds, and to 
comply with international conventions to which it is a party (Table 3.5). An exception to Brazil's import ban on remoulded tyres, in favour of su ch imports from MERCOSUR, has been challenged 
under the WTO dispute settlement mechanism; in September 2009, Brazil reported its full 
                                               
53 The tax base for the calculation of PIS and COFI NS is reduced by 30.2% for certain trucks, and 
by 48.1% for selected machinery and vehicles, provided they are imported for resale.  Reinsurance premiums 
contracted abroad are taxed at 15% of the amount paid  or remitted abroad.  The calculation methodology for 
PIS and COFINS on imports is described in Normative Instruction SRF No. 572 of 22 November 2005.  Viewed at: http://www.receita.fazenda.gov.br/legislacao/ins/2005/in5722005.htm. 
54 Complementary Law No. 116 of 31 July 2003. 
55 Constitutional Amendment No. 37 of 13 June 2002. 
56 The authorities estimate the revenu e forgone as a result of customs tariff concessions at R$2.2 billion 
in 2009 and R$3 billion in 2012. 
57 Recent amendments to the list of eligible goods are contained in Decrees No. 7,705 (25 March 2012), 
No. 7,725 (21 May 2012), No. 7,742 (30 May 2012), No. 7,770 (28 June 2012), No. 7,792 (17 August 2012), 
No. 7,796 (30 August 2012), No. 7,834 (31 October 2012), and No. 7,879 (27 December 2012). 
58 Decree No. 7,545 of 2 August 2011. WT/TPR/S/283 • Brazil 
 
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  compliance with the recommendations and rulings of the Dispute Settlement Body.59 
Implementation of the panel recommendations was done by means of SECEX/MDIC Directive 
No. 24/09 of 26 August 200960 in compliance with judgment ADPF No. 101 of the Federal Supreme 
Court (STF) of Brazil (24 June 2009). The authorit ies indicated that the import ban on remolded 
tyres was aimed at protecting public health and preserving the environment. Imports of used 
consumer goods are prohibited for environmental, safety, and consumer rights reasons. 
Table 3.5 Import prohibitions, 2012 
Product Description Legal basis 
Toys that replicate 
firearms Imports and domestic production Article 26 of Law No. 10,826 of 
22 December 2003 
Weapons and 
ammunition Private imports of goods intended for exclusive use by 
military or police forces Decree No. 2,998 of 23 March 
1999 
Programmed electronic machines for gambling Prohibited on moral grounds  Law No. 37 of 
18 November 1966 
Used and 
retreaded tyres Used/retreaded tyres under HS heading 4012, even if 
the intended use is as raw material; re-imports after 
outward processing of tyres used in aeronautics (HS 
4012.13.00) are exempted  CONAMA Resolution No. 452 of 
2 July 2012 
Used consumer 
goodsa May only be imported by the State or educational and 
scientific institutions Article 27 of MDIC Ordinance 
No. 235 of 7 December 2006 
Substances that 
deplete the ozone 
layer Prohibited substances in ac cordance with the Montreal 
Protocol CONAMA Resolution No. 267 of 
11 December 2000 
Hazardous waste Import ban; ot her movements must follow Basel 
Convention procedures CONAMA Resolution No. 452 of 
2 July 2012 
Illicit drugs Substances and plants that  may cause physical or 
psychological dependence SVS/MS Ordinance No. 344 of 
12 May 1998 
Endangered 
animals and plants Animals and plants listed as endangered by CITES Decree No. 3,607 of 
21 September 2001 
Wines Prohibited if transported in containers of more than 
5 litres Article 26 of Law No. 7,678 of 
8 November 1988 
Hormone-treated meat and poultry The importation, production, commercialization and 
use of natural or artificial substances with anabolic hormonal properties, for the purpose of promoting 
growth and weigh, are prohibited  MAPA Normative Instruction 
No. 17 of 18 June 2004  
a Imports of used non-consumer goods (except aeronautic goods and packaging materials in 
temporary admission or re-importation) are subject to non-automatic licensing. 
Source: Information provided by the Brazilian authorities. 
3.54.  Brazil's most recent notification on import licensing procedures dates from 2011.61 During 
the review period Brazil has replied to questions by Canada, China, Mexico, Thailand, and the 
United States, regarding its non-automatic import licensing procedures62; questions on the same 
topic have also been submitted by Switzerland.63 
3.55.  Brazil maintains a system of automatic and non-automatic licences for imports of various 
products, regardless of their origin.64 Requests for both types of licences, made either directly by 
the importer or by an authorized representati ve, are processed through SISCOMEX to ensure a 
centralized flow of computerized information; all licences are non-transferrable and valid for 
90 days.65 Non-automatic import licences are issued and registered directly in SISCOMEX by 
                                               
59 Dispute DS332. Viewed at: http://www.wto.org/english/tratop_e/dispu_e/cases_e/ds332_e.htm. 
60 Altered by SECEX Directives No. 10/10 (24 May 2010) and No. 23/11 (14 July 2011). 
61 WTO document G/LIC/N/3/BRA/9 of 16 September 2011. 
62 WTO documents G/LIC/Q/BRA/15 (27/04/2010), G/LIC/Q/BRA/14 (14/01/2010), G/LIC/Q/BRA/13 
(21/10/2009), G/LIC/Q/BRA/12 (08/05/2009), and G/LIC/Q/BRA/9 (16/01/2009). 
63 WTO document G/LIC/Q/BRA/16 of 17 April 2012. 
64 A compilation of import licensing regulations is available in Chapter II of SECEX Ordinance No. 23 
(14 July 2011) and its subsequent amendments (MDIC online information. Viewed at: http://www.mdic.gov.br/ 
sitio/interna/interna.php?area=1&menu=3113&refr=1695). 
65 Import licences must be obtained  prior to customs clearance; in some cases, the import licence may 
have to be obtained before the goods are shipped. WT/TPR/S/283 • Brazil 
 
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  16 agencies66; the statutory timeframe for processing requests is 60 calendar days. The 
authorities noted that, although there are no overlaps in the licensing entities' competences, imports of certain goods may require licences from more than one entity. Refusals to grant a licence may be appealed before the relevant licensing agency. Some agencies may levy a fee for 
the import licence; according to the authorities, the fees reflect the cost of services rendered. 
3.56.  In general, automatic licensing is used for statistics collection, and monitoring of specific 
products and import operations, including thos e under the drawback regime. According to the 
authorities, the purpose of non-automatic licensin g is to prevent environmental damage and harm 
to human, plant or animal health, as well as to control imports of products classified as weapons and products subject to (tariff and non-tariff) quotas or trade remedies. The granting of non-automatic licences for imports of used machinery and equipment is conditional on proof that such 
items are not produced in Brazil and cannot be subs tituted by a similar item currently produced in 
Brazil. Non-automatic licensing is also used in the administration of duty and tax concessions; to benefit from such concessions, imports must undergo a "similarity examination", which must 
ascertain that no equivalent domestic production exists.
67 While most licensing requirements are 
established and modified through appropriate legislation, product coverage may be subject to administrative discretion when allowed by the normative framework.  
3.57.  Lists of products subject to automatic and non-automatic import licensing are published 
online by the MDIC
68, but the most up-to-date information is available to registered users of 
SISCOMEX. In February 2013, goods subject to no n-automatic licensing significantly outnumbered 
those subject to automatic licensing. During 2009-11, non-automatic import licensing 
requirements were introduced on, inter alia , motor vehicles, apricots, and wheat flour.  
3.2.7  Contingency measures 3.2.7.1  Overview 
3.58.  Brazil is a significant user of trade reme dies, particularly anti-dumping (AD) measures, and 
there are indications that these remedies may play  an increasingly important role in its future 
trade policy. Trade defence has been identified as a component of the Plano Brasil Maior,  pursuant 
to which a number of steps have been taken to strengthen trade defence.
69 Brazil has announced 
its intention to increase the number of trade remedy investigators, and has implemented changes to certain practices (anti-circumvention, AD applic ation formats, national interest), while a broader 
reform of the regulatory framework is under consideration. The number of Brazil's 
AD investigations and measures in force has been increasing since the last review period; Brazil 
has become somewhat more active in initiating countervail (CV) investigations, and in 2012 initiated its first safeguard investigation since 2008. 
3.2.7.2  Anti-dumping and countervailing measures 
3.2.7.2.1  Legislation and institutions 3.59.  Decree No. 1,355 of 30 December 1994, which promulgated the Uruguay Round 
Agreements, and Law No. 9,019 of 30 March 1995, as  amended, govern the application of AD and 
CV measures.
70 In addition, Decree No. 1,602 of 23 August 199571 and Decree No. 1,751 of 
19 December 199572 further regulate the application of AD and CV measures respectively. SECEX 
Act No. 59 of 28 November 2001 clarifies the conduct of trade remedy investigations with respect 
                                               
66 For a list of the competent entities and the prod ucts under their respective  responsibility, see:  
http://www.mdic.gov.br/arquivos/dwnl_1308919721.pdf. 
67 The examination is carried out by SECEX prior to the goods' shipment from the country of origin; the 
relevant modalities are set out in Decree No. 6,759 of 5 February 2009. Imports from other ALADI countries are considered as "special cases". The authorities affirm that the lack of a domestic equivalent is a prerequisite 
for the tax reduction or exemption, not for the importation of the good. 
68 MDIC online information. Viewed at: http://www.mdic.gov.br/arquivos/dwnl_1362506157.pdf. 
69 Discurso da Presidenta da Républ ica, Dilma Rousseff, durante cerimô nia de anúncio de  novas medidas 
do Plano Brasil Maior, Brasília-DF , 3 April 2012; and Plano Brasil Maior 2011/2014, Situação de conjunto de 
medidas : 7 May 2012.  Viewed at:  http://www2.planalto.gov.br. 
70 WTO document G/ADP/N/1/BRA/1-G/SCM/N/1/SCM/BRA/1. 
71 WTO document G/ADP/N/1/BRA/2. 
72 WTO document G/SCM/N/1/BRA/2. WT/TPR/S/283 • Brazil 
 
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  to confidential information, time periods, an d economies that are not predominantly market-
oriented.73 Rules regarding the contents of an application requesting initiation of an 
AD investigation, as recently revised, are contained in SECEX Directive No. 46 of 23 December 2011
74, while those relating to CV are in SECEX Circular No. 20 of 2 April 1996. With 
the exception of SECEX Circular No. 20, Brazil's  legislation has been notified to the WTO and 
discussed in the Committees on Anti-Dumping Practices and/or on Subsidies and Countervailing Measures.
75 
3.60.  SECEX, through its Department of Trade Remedies (DECOM), is responsible for carrying out 
AD, CV and safeguards investigations and all other related procedures. Brazil intends to increase DECOM's team of investigators from 30 to 120, and has opened a public competition to hire those investigators.
76 The Chamber of Foreign Trade (CAMEX) is responsible for making final decisions 
regarding the application of provisional AD and CV measures and definitive duties, for altering or 
terminating definitive duties as a result of a review, and for accepting or terminating undertakings. CAMEX is also responsible for establishing the rules and procedures for contingent trade remedy 
investigations.
77 
3.61.  In December 2011, SECEX issued Directive No. 46, which contains revised guidelines 
relating to the information to be included in an application for the initiation of an 
AD investigation.78 According to DECOM, the new format simplifies the application process by 
eliminating requests for some information that is not used during the investigation process. At the same time, it requires the application to include additional information that previously would have been gathered only after the initiation of an investigation. This eliminates the need to alter the 
period of investigation or update the data after initiation, thus permitting the authorities to verify 
the applicants' information and to impose provisional measures, in the case of affirmative determinations, within 120 days.  
3.62.  Under Brazilian legislation, an AD or CV duty may be equal to or less than the margin of 
dumping or the amount of the subsidy, and is for the exclusive purpose of neutralizing the 
injurious effects of dumped or subsidized imports.
79 Pursuant to its regulations, the lesser duty 
rule is mandatory as a recommendation of the revi ewing agency and, in the majority of cases, 
Brazil has followed this recommendation, i.e. duties  are applied to the extent necessary to remove 
the injury to the domestic industry, even if that implies a duty lower than the dumping margin. However, since 2007 Brazil has applied the full  margin of dumping on suppliers who do not 
respond to the questionnaires sent by the SECEX during the investigation.
80 In May 2011, CAMEX 
decided that the full margin of dumping/subsidization could be applied even in cases in which there is a technical recommendation for a lesser duty.  
3.63.  In exceptional circumstances, for reasons of national interest, the Brazilian authorities may 
decide to suspend the application of definitive AD or CV measures, to impose a definitive measure in an amount different from the one recommended by DECOM, or to waive the application of a 
provisional measure recommended by DECOM.
81 During the review period, CAMEX invoked 
national interest on a number of occasions. For exam ple, it suspended application of an AD duty on 
Portland cement originating in Mexico and Venezuela and destined for consumption in certain Brazilian states to preserve price stability
82; it imposed a lower specific duty than recommended on 
ball point pens in order to avoid increasing the costs of teaching materials83; and it capped the 
                                               
73 WTO document G/ADP/N/1/BRA/2/ Suppl.1-G/SCM/N/1/BRAZ/2/Suppl.1. 
74 WTO document G/ADP/N/1/BRA/2/Suppl.8. 
75 For written questions and answers regarding thes e laws, see WTO documents G/ADP/Q1/BRA/1 to 15, 
and G/SCM/Q1/BRA/1 to 15. 
76 Law No. 12,545 0f 14 December 2011. 
77 Decree No. 4,732 of 10 June 2003. 
78 WTO document G/ADP/N/1/BRA/2/Suppl.8. 
79 Decree No. 1,602, Article 45; Decree No. 1,751, Article 55. 
80 See, e.g. Resolution No. 24 of 19 April 2012, para. 7.1.    
81 Decree No. 1602, Article 64.4; Decree No. 1751, Article 73.3. 
82 CAMEX Resolution No. 64 of 1 September 2010. 
83 Resolution No. 24 of 28 April 2010. WT/TPR/S/283 • Brazil 
 
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  specific duty on fertilizer inputs.84 Most recently, CAMEX replaced a specific duty on polyvinyl 
chloride resins with an ad valorem  duty in order to restore the efficiency of the duty.85  
3.64.  In 2012, CAMEX established a Technical Group for Public Interest Assessment (GTIP) 
pursuant to Resolution No. 13 of 29 February 2012. The GTIP is tasked with examining the 
suspension or modification of definitive AD and CV measures as well as waivers on the application 
of provisional AD and CV measures for reasons of public interest. Resolution No. 13 sets out procedures for the operation of the GTIP. It provid es that requests to suspend or modify measures 
are to be submitted to the Secretariat for Economic Monitoring of the Ministry of Finance, which 
serves as the GTIP secretariat, and must be substantiated by factual and legal evidence. In addition, any GTIP member or other federal government body may request an assessment by the GTIP of any definitive measure or on-going invest igation. The GTIP has four months to submit its 
conclusions to the CAMEX, subject to justified exte nsion;  however, in the case of an on-going 
investigation, it shall not submit its conclusions to CAMEX until a final recommendation on the application of provisional or definitive measures has been submitted to that body. The GTIP is to 
include in its acts the grounds and reasons for its decision. As at March 2013, the GTIP was 
reviewing a request for non-application of AD duties on polymeric MDI (NCM 3909.30.20) and for the suspension, for public interest reasons, of de finitive AD duties on lightweight coated paper 
(NCM 4810.22.9).
86 An investigation that took place in 2012 with respect to the importation of 
knitted or crocheted long pile fabrics (NCM 6001.10.20) was closed, deciding against the suspension of the extension of duties.
87  
3.65.  A provision authorizing the extension of AD and CV measures where circumvention 
frustrates their application was added to Brazilian law in 2008.88 Since then, a CAMEX resolution 
and a SECEX Directive governing implementation have been promulgated.89 Brazil may treat as 
circumvention (i) the import from a country subject to a measure of parts, pieces and components 
for the manufacture of a product that resembles the product subject to the measure; (ii) the 
import of a product manufactured in a third country  using parts, pieces, and components from the 
country subject to the measure; and (iii) the import  of the good with minor modifications that do 
not affect its end use.90 In determining whether there is circumvention, Brazil will consider 
whether changes in trade flows results from an activity, process or practice which is insufficiently motivated or lacks economic justification; whether the remedial effects of a measure are being undermined, and, in the case of an AD measure, whether the goods are being sold in Brazil a 
prices lower than the normal value previously established. A manufacturing operation will be 
treated as circumvention if imported parts ex ceed 60% of the total parts.  There is no 
circumvention if the value added exceeds 25% of the cost of manufacture.
91 
3.66.  In February 2012, Brazil took its first an ti-circumvention action, extending an AD measure 
on blankets from China to cloth imported from China as well as to blankets imported from Paraguay and Uruguay using imported Chinese cloth. In July 2012, Brazil took a second action, 
extending an AD measure on footwear from China to parts and components imported from China.  
However, Brazil found that there was no third-country circumvention and declined to extend the measure to footwear imported from Indonesia and Viet Nam. In September 2012, the extension of the AD measure due to circumvention practice was revoked at the request of the petitioner 
(Resolution CAMEX No. 65/2012). As at March 2013, no other anti-circumvention proceedings 
were pending. 
3.67.  Brazil is undertaking a broader revision of Decree No. 1602, which governs the application 
of AD measures. To this end it has opened the Decree for public comment
92, and has published the 
                                               
84 Resolution No. 41 of 8 June 2010. 
85 Resolution No. 66 of 6 September 2011. 
86 Resolution CAMEX No. 50/2012 of 5 July 2012. 
87 Resolution CAMEX No. 92/2012 of 18 December 2012. 
88 Article 10-A of Law No. 9,019 of 30 March 1995, as modified by Law No. 11,786 of September 2008. 
89 CAMEX Resolution No. 63 of 17 August 2010, WTO document G/ADP/N/1/BRA/2/Suppl.4-
G/SCM/N/1/BRA/2/Suppl.4; and SECEX Directive 21 of 18 October 2010, WTO document G/ADP/N/1/BRA/2/Suppl.5-G/SCM/N/1/BRA/2/Suppl.5. 
90 A fourth category of circumvention, "any other prac tice designed to thwart the effective application of 
anti-dumping measures", was subsequently rescinded. CAMEX Resolution No. 25 of 5 May 2011, WTO 
document G/ADP/N/1/BRA/2/Su ppl.6-G/SCM/N/1/BRA/Suppl.6. 
91 CAMEX Resolution No. 63, Article 2; and SECEX Directive 21, Article 4.   
92 SECEX Portaria No. 28 of 25 August 2011. WT/TPR/S/283 • Brazil 
 
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  comments received on the internet. As at March 2013, a revised decree had not yet been 
promulgated.  
3.2.7.2.2  AD/CVD use during the review period 3.68.  Although subject to fluctuation, Brazil's use of AD generally showed an upward trend during 
the review period. The number of new cases varied significantly from year to year, but with the 
exception of 2009 was above historical trends. Brazil notified 26 new cases in the first half of 2012, and DECOM recently noted that as of 20 September 2012 it had initiated 47 new 
investigations in 2012, exceeding the previous record of 40 investigations in 2010.
93 In terms of 
measures in force, Brazil had 83 anti-dumping measures in force as of 30 June 2012 (up from 63 in October 2008), of which 20 related to imports from China and 10 to imports from the United States. The number of countervailing investigations and measures remains small although the 
three new countervail investigations opened in 2010 equalled the total number of new cases 
opened since the entry into force of the WTO Agreement in 1995.  
3.2.7.3  Safeguard measures  
3.69.  The WTO Agreement on Safeguards was incorporated into Brazilian legislation through 
Decree No. 1,355 of 30 December 1994. Administrative  procedures for the application of safeguard 
measures are established in Decree No. 1,488 of 11 May 1995, as amended. 
3.70.  A common MERCOSUR regulation, based on the WTO Agreement on Safeguards, establishes 
procedures for the application of safeguard measures by MERCOSUR, as a single entity, and in the name of a member State with respect to imports of third countries.
94 However, this regulation is 
not yet in force, since other MERCOSUR members have not incorporated it into their legislation. 
3.71.  Safeguard measures are not applied among MERCOSUR members, but may apply to 
MERCOSUR's associate members, i.e. Chile and Plur inational State of Bolivia. In the respective 
bilateral agreements with these two countries, ther e are specific regulations on the application of 
preferential safeguard measures, which consist of temporary suspension or reduction of tariff 
preferences. 
3.72.  Safeguard investigations are initiated and conducted by the SECEX. CAMEX is responsible 
for determining safeguard measures95, which may take the form of tariff surcharges or 
quantitative restrictions and be applied for a maximum of four years, renewable for six years. Measures applied for over three years are subject to a mid-term review by SECEX. 
3.73.  Brazil's only existing safeguard measure, on desiccated coconut, was first applied in 2002, 
and was most recently extended for two years on 1 September 2010; accordingly, it was 
terminated on scheduled on 31 August 2012.
96 On 15 March 2012, Brazil initiated a new safeguard 
investigation on fine or table wine.97 The investigation was terminated on 23 October 2012, at the 
request of the petitioners.98 
3.2.8  Technical regulations, conf ormity assessment, and standards 
3.74.  Brazil's latest submission to the WTO outlining activities related to the implementation and 
administration of the TBT Ag reement, dates back to 2003.99 Apart from an extension of INMETRO's 
responsibilities, the Brazilian institutional framework in this field remained broadly unchanged during 2009-12.
100 The National Council of Metrology, Standardization and Industrial Quality 
(CONMETRO) oversees the National System of Me trology, Standardization and Industrial Quality 
                                               
93 SECEX press release, "Abertura de investigações de defesa come rcial já é recordé este ano", 
20 September 2012. 
94 19th Additional Protocol to ACE No, 18 MERCOSUR (modified by the 49th Additional Protocol), 
incorporated into Brazilian legislation through Decree No. 2,667 of 10 July 1998. 
95 Decree No. 4,732 of 10 June 2003. 
96 CAMEX Resolution  No. 51 of 17 July 2010; WTO document G/SG/N/14/BRA/3. 
97 G/SG/N/6/BRA/5. 
98 Circular SECEX No. 54/2012. 
99 WTO document G/TBT/2/Add.26/Rev.2, 26 June 2003. 
100 WTO document WT/TPR/S/212/Rev.1, 11 May 2009. WT/TPR/S/283 • Brazil 
 
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  (SINMETRO), which regroups public and private entities active in metrology, standardization, 
quality management, and certification at the federal and sub-federal levels. The Brazilian Association for Technical Standardization (ABNT) is in charge of developing (voluntary) standards, 
while (mandatory) technical regulations may be is sued by 31 federal agencies, according to their 
respective competence. Conformity assessment procedures defined by CONMETRO are binding 
only for INMETRO; other regulatory agencies have autonomy with respect to the choice of conformity assessment systems.  
3.75.  INMETRO acts as the Executive Secretaria t of CONMETRO, the coordinator of the Brazilian 
Network of Legal Metrology and Quality, and the national enquiry point under the TBT Agreement; 
it is also responsible for implementing the TB T notification provisions.  Since August 2011, 
INMETRO's competences include participating in SISCOMEX’s consenting body for non-automatic 
licensing, adopting measures to prevent deceptiv e trade practices, and working with the Federal 
Police to improve the conformity assessment of go ods before they enter Brazil; import licensing 
responsibilities, for certain goods, were also transferred from DECEX to INMETRO.
101 During 
customs clearance, INMETRO may be called upon to assist the RFB in verifying compliance of 
imported goods' with Brazilian technical regulations (section 3.2.1).102 The authorities noted that 
INMETRO and ANVISA work together in the mandatory certification of products subject to sanitary 
control; INMETRO puts in practice the conformity  assessment process, whereas the relevant rules 
and requirements are set by ANVISA.103 
3.76.  Brazil does not grant equivalence to tec hnical regulations adopted by any trading partner, 
but accepts equivalence in test results. Brazil  did not notify to the WTO of any new mutual 
recognition agreements (MRAs) on conformity assessment during the review period; its five 
notifications dating back to 2003 were covered in the Secretariat Report for Brazil's previous 
Review.104 Through INMETRO's General Coordination fo r Accreditation (CGCRE), Brazil has mutual 
recognition agreements on accreditation and certification with 80 accreditation bodies 
in 66 economies. INMETRO also represents Brazil in relevant initiatives within MERCOSUR, LAIA, and the Organization of American States, and has signed technical cooperation instruments, 
including memoranda of understanding and agreements, with entities in: Argentina, Bolivia, China, 
Chile, Cuba, Costa Rica, the Dominican Republic, Ecuador, Germany, Guatemala, France, India, 
Italy, Japan, Lebanon, Mexico, Mozambique, Pana ma, Paraguay, Peru, Portugal, the Republic of 
Korea, Singapore, South Africa, Russia, Trinidad and Tobago, Turkey, Ukraine, the 
United Kingdom, the United States, Uruguay, and Venezuela. 
3.77.  In the framework of MERCOSUR, requests for the elaboration of technical regulations, or for 
the revision of regulations already in force, must be submitted by a member State. Accepted 
requests are forwarded to working groups within the Common Market Group (GMC) for 
examination, preparation of draft regulations, and incorporation of comments received through public consultation. Technical regulations are no tified to the WTO after each MERCOSUR member 
country has carried out domestic consultations, but before they are adopted by the GMC in the 
form of Resolutions. The Resolutions enter into force once they have been incorporated in national legislation and published by each member country. In 2010, MERCOSUR launched negotiations to make the revision of MERCOSUR technical regulations more fluid and more regular. 
3.78.  Although not legally binding, a set of re commendations for the elaboration, dissemination, 
periodic review, and elimination of technical regulations and conformity assessment procedures is 
                                               
101 INMETRO's additional responsibilities are set out in Provisional measure No. 541 of 2 August 2011, 
converted into Law No. 12,545 of 14 December 2011; they include: elaborating and issuing technical regulations regarding metrological control; exercising  administrative police po wers and issuing technical 
regulations on conformity assessment (with regard to  security, environmental and health protection, and 
prevention of deceptive trade practices); implementi ng, coordinating, and supervising legal metrology and 
compulsory conformity assessment activities; accreditin g conformity assessment bodi es; maintaining a register 
of items ( Registro de objetos ) for the purposes of compulsory confor mity assessment; mo nitoring compliance 
with the principles of good laborato ry practice; and approving the importat ion of goods that are both regulated 
by it and subject to non-automati c licensing or other administrative  controls prior to clearance for 
consumption. 
102 INMETRO may levy fines varying from R$100 to R$1.5 million for non-compliance with mandatory 
technical regulations and conformity assessment procedures. 
103 INMETRO’s Certificate of Compliance is a prerequisite for registration at ANVISA. 
104 WTO document WT/TPR/S/212/Rev.1 of 11 May 2009. WT/TPR/S/283 • Brazil 
 
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  contained in CONMETRO's Guide on Good Regulatory Practice.105 According to the authorities, the 
competent agencies have committed, in principle, to follow the guide. Technical regulations may be established through laws, decrees or resolutions, and should be published in the Official 
Journal . A period of six months is typically allowed between the publication of the measure and its 
entry into force. Ministries and agencies with authority to elaborate and issue technical regulations 
may do so ex officio , or at the request of a third party; the holding of public consultations is 
generally required, except in exceptional cases. In principle, if a proposed technical regulation is 
considered to have trade effects, INMETRO would forward a draft to the WTO for Members' 
comments. After all comments and suggestions are taken under consideration, the competent ministry or agency decides whether to adop t the technical regulation, with or without 
modifications. According to the authorities, most technical regulations enacted in Brazil are based 
on international standards; when this is not the case, they are based on performance criteria. The 
recommended period for review and revision of technical regulations is four years. 
3.79.  The general process for adopting conformity assessment procedures is similar to the one for 
technical regulations. Conformity assessment may involve certification, performance verification, 
sampling, labelling, inspection, and a conformity declaration by the supplier; certain activities (e.g., certification) may be delegated to accredited third parties. The supplier's declaration of 
c o n f o r m i t y  i s  a n  a d m i s s i b l e  i n s t r u m e n t  o n l y  f o r  p r o d u c t s  o r  s e r v i c e s  o f  l o w  t o  m e d i u m  r i s k  t o  
human health and safety. In general, labelling requirements relate to the products' quality, quantity, composition, guarantee, shelf life, orig in, and risks to consumer health and safety. All 
labels must bear this information in Portuguese and indicate the brand or name of the 
manufacturer. 
3.80.  As at 19 January 2013, INMETRO applied the following compulsory conformity assessment 
procedures: certification (110 product groups, 9 services and 2 processes); performance 
verification (4 product groups); conformity declaration by the supplier (12 product groups and 
5 services); inspection (4 product groups and 6 services); and labelling (13 product groups). 
Between January 2009 and January 2013, INMETRO introduced compulsory certification on 
47 product groups, while the supplier's declaration of conformity and labelling became mandatory 
for 3 and 8 product groups, respectively. Additional compulsory conformity assessment procedures are administered by other competent entities, such as ANVISA, ANATEL, and the Ministry of Agriculture. SISCOMEX (section 3.2.1.), accessible only to registered users, contains the most up-
to-date information on conformity assessment measures affecting imports. 
3.81.  The commercialization of items that are bo th subject to compulsory conformity assessment 
and under INMETRO's authority (directly or through delegation) is conditional on inscription in its 
Register of items
106; this requirement does not apply to items under the regulatory competence of 
other federal agencies. The Register is managed through a computerized system ( Orquestra ), 
which is also being used by INMETRO in its non-automatic import licensing activities.107 Other 
regulatory agencies, such as ANVISA and ANATEL, may also require inscription in their respective 
registers. 
3.82.  Assisted by CONMETRO's technical committees, INMETRO acts as Brazil's national 
accreditation body. It accredits entities engaging in certification, inspection, training, calibration, 
and testing, including agri-toxic laboratories and clinical analysis laboratories. In general, the 
accreditation process comprises the submission of a formal request, a review of supporting documentation, and an in situ  inspection; entities are subject to  periodic evaluations to maintain 
their accreditation. According to the authorities, entities seeking accreditation to carry out 
compulsory conformity assessment activities are generally not required to have a permanent office in Brazil, but a few technical regulations stipulate it as a prerequisite.  
                                               
105 CONMETRO (2007). 
106 Items subject to model approval  by INMETRO are exempted (INMET RO online information. Viewed 
at: www.inmetro.gov.br/metlegal/instrumentosApreciacao.asp). 
107 INMETRO collects a fee of R$47.39 for inscription/renewal in its Register of items; in a few specific 
cases, such as fire extinguisher maintenance and inst allation of natural gas kits for vehicles, the fee is 
R$1,197.48. WT/TPR/S/283 • Brazil 
 
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  3.83.  In January 2013, 305 calibration laboratories and 521 sampling laboratories were accredited 
in Brazil; there were also 721 entities with active accreditations to perform conformity 
assessments (certification, inspection, performance verification).108  
3.84.  The ABNT coordinates the consensus-ba sed development of Brazilian standards, and 
represents Brazil in the ISO/IEC and in regional normalization fora. It signed the WTO/TBT Code of 
Good Practice in 1995 and follows its Annex 3.109 Standards are elaborated by technical 
committees and sectoral standardization bodies; all interested parties are allowed to submit 
requests for new standards and to participate in the standardization work. At present, there are 
146 active technical committees. Draft standards are open to national consultation for 60 days. Once a consensus is reached among all interested parties, the standard is adopted by the ABNT. 
Standards older than five years are reviewed to en sure that they remain up to date; the review 
process also includes 60 days of public enquiry. Standards adopted by the ABNT may be used as 
references in the adoption of technical regulations by INMETRO, especially in the absence of international and regional ones. 
3.85.  Between January 2009 and January 2013, Brazil adopted 782 standards, 359 technical 
regulations, including those harmonized at MERCOSUR level, and 53 compulsory conformity assessment procedures.
110 During the same period, the WTO Committee on Technical Barriers to 
Trade was notified of 145 draft technical regula tions and 71 conformity assessment procedures 
relating to international trade. A number of Brazil's notifications during the review period ran short of the minimum period (60 days) for the submission of comments by Members. 
3.2.9  Sanitary and phytosanitary measures 
3.86.  The Ministry of Agriculture, Livestock and Food Supply (MAPA), through its Secretariat of 
Agricultural Protection (SDA), is responsible for the protection of animal and plant health. The SDA 
is vested with authority to control the sanitary and phytosanitary (SPS) aspects of production and 
international trade of all livestock, fruits, vegetabl es, grains, plants, veterinary drugs, pesticides, 
and their components; it also registers and inspects products and activities that use genetically modified organisms, on behalf of the National Technical Commission on Biotechnology (CTNBio), 
which issues the relevant authorizations. The Ministry of Fisheries and Aquaculture (MPA) is 
responsible for aquatic animal health; its General Coordination Office for Aquatic Animal Health (CGSAP) carries out sanitary controls to protect the natural and reproduction environments in Brazil, including on imports of fish and aquati c animals and their reproductive materials. The 
Brazilian Health Surveillance Agency (ANVISA), an  autonomous entity linked to the Ministry of 
Health under a management contract, is in charge of controlling the production and marketing of products and services subject to sanitary surveillance for the protection of human health. ANVISA 
is responsible for, inter alia , approving the importation of food products and performing sanitary 
inspections at the points of entry into Brazil. 
3.87.  Brazil's enquiry points comprise: MAPA's Secretariat for International Relations of 
Agribusiness, ANVISA's Office of Internationa l Affairs (formerly the Assistance Unit for 
International Issues), and MPA's CGSAP.
111 The Ministry of Foreign Relations is Brazil's notification 
authority for SPS matters.112 As a general rule, proposed SPS measures are published in Brazil's 
Official Journal  and notified to the WTO; 362 regular and 3 emergency notifications were 
submitted to the WTO between January 2009 and Ja nuary 2013. As at the time of its previous 
Review, Brazil's notification record continues to show a predominance of comment periods of less than 60 days (85% of the 362 regular notifications) ; also, limited use is made of provisions for a 
six-month period between the measure's publication and its entry into force. According to the 
authorities, comments from interested parties have generally been taken into consideration even after the stipulated deadlines. 
3.88.  Brazil is a member of the Codex Alimentarius Commission, the World Organisation for 
Animal Health (OIE), and the International Plant Protection Convention (IPPC), and a party to the 
                                               
108 INMETRO online information. Viewed at: http: //www.inmetro.gov.br/qualidade/regObjetos.asp. 
109 WTO document G/TBT/CS/2/Rev.14, 20 February 2008. 
110 The authorities noted th at, for technical reason s, exact figures on te chnical regulations and 
conformity assessment requirem ents are hard to compile. 
111 WTO document G/SPS/ENQ/26, 11 March 2011. 
112 WTO document G/SPS/NNA/16, 11 March 2011. WT/TPR/S/283 • Brazil 
 
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  Convention on Biological Diversity. At the sub-regional level, Brazil participates in relevant 
technical work within MERCOSUR, in the Southern  Cone Plant Health Committee (COSAVE), and in 
the Standing Veterinary Committee of the South Cone  (CVP). Its bilateral initiatives on SPS issues 
include the negotiation of memoranda of understanding and/or cooperation agreements with 
various countries, and the establishment of Consultative Committees on Agriculture (CCAs) as a 
means of ensuring regular exchanges on relevant topics.113 Brazil accepts phytosanitary and 
zoosanitary certificates issued by official sanitary services in countries that follow the guidelines of 
Codex, IPPC, OIE, and other international scientific organizations.  
3.89.  Apart from general procedures issued by MPA and MAPA in their respective areas of 
competence114, Brazil's SPS legislation underwent no significant changes with respect to import-
related controls during 2009-13.115 In 2012, MAPA implemented a computerized system (SIGVIG) 
for the management of agricultural products and inputs transiting through Brazil; SIGVIG is not 
interconnected with SISCOMEX (section 3.2.1).  
3.90.  Brazil's SPS system is based on risk analysis that generally takes account of an import's 
origin and product characteristics. The conclusions of pest risk analyses are notified, as a draft for 
comments, to the pertinent SPS authority of the country of origin and to the WTO. After consideration of the comments received, phytosanitary import requirements are publicized in 
Brazil’s Official Journal  and notified to the country of origin and the WTO; there is no statutory 
time-frame for the assessment process.
116 Risk assessments for plant pests comply with IPPC 
standards; in general these assessments are required when there is no record of prior importation of the plant or plant product concerned from a given country. Risk assessments for imports of 
animals and animal products follow OIE standards. Competence for the adoption of SPS measures 
is vested in ANVISA, MAPA, and MPA; while MPA establishes the sanitary requirements for fish, 
unprocessed fish products, live aquatic animals and their respective reproductive materials, cells, 
organs, and tissues, the administration of relevant import authorizations and licences is done by 
MAPA.
117  
3.91.  The importation of any product subject to SPS controls requires a non-automatic licence; 
ANVISA and SDA issue licences in their respective areas of competence directly through 
SISCOMEX. Additional requirements, such as prior authorization of each shipment to Brazil and inscription in a register, apply to some products; some of the relevant procedures may not yet be performed electronically.
118 As at 18 January 2013, imports classifiable under 3,275 eight-digit 
tariff lines were subject to SDA controls, which could involve the intervention of up to three 
technical departments; procedures requiring, inter alia , SDA authorization prior to shipment or 
arrival at Brazil's borders applied to 2,675 of these lines.119 A consolidated list of the products 
controlled by ANVISA upon importation is available online.120 Importers of controlled foodstuffs, 
cosmetics, and pharmaceutical products must obta in an authorization from ANVISA and a licence 
from a state or municipal sanitary authority; the licence serves as an authorization from the 
National Sanitary Surveillance System and is valid throughout Brazil. Inscription in ANVISA's 
sanitary register is also a prerequisite for importation of some of these products121; the remaining 
product categories regulated by ANVISA require a wr itten notification by the prospective importer. 
The statutory time-frame for the registration of new products with ANVISA is 60 days. Subsequent 
                                               
113 Brazil has established CCAs with Canada, China, the European Union, Indo nesia, Korea, Mexico, 
Russia, Ukraine, and the United States; a similar triparti te arrangement is in force with India and South Africa. 
114 MPA Normative Act No. 14 of 9 December 2010 and MAPA Normative Act No. 51 of 
4 November 2011. 
115 The core legal texts are: Ministerial Act No. 183 of 9 October 1998, and Resolution RDC ANVISA 
No. 81/08. 
116 Generally, the cost of the risk analysis is borne by the Brazilian  Government; however, interested 
parties may choose to contract, at th eir own expense, an accredited an alyst (university or laboratory). 
117 Requests concerning such imports are forwarded by SDA to MPA for evalua tion and approval; once 
the approval is granted, SD A issues the authorization. 
118 ANVISA is working on the development of a system for electronic submission of import authorization 
requests. 
119 MPA online information. Viewed at: http://www.ag ricultura.gov.br/arq_editor/file/Aniamal/Importa% 
C3%A7%C3%A3o/Anexo%20IN%2051%2018_01_13(1).xls. 
120 ANVISA online information. View ed at: http://portal.anvisa.gov.br/wps/wcm/connect/c89fc6804ce 
34110b0d8ba551355428f/IMPORTA%C3%87%C3%83O+A NVISA+setembro+2012.pdf?MOD=AJPRES. 
121 Products that require registration are listed in ANVISA Resolution RDC No. 278 of 
22 September 2005 (foodstuffs); ANVISA Resolution RD C No. 211 of 14 July 2005 (cosmetics); and ANVISA 
Resolution RDC No. 132 of 29 May 2003, as amended (pharmaceuticals). WT/TPR/S/283 • Brazil 
 
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  imports of products in ANVISA's sanitary register, regardless of the importer, must also be notified 
to the agency.  
3.92.  Plants and plant products commercialized in Brazil, including imports, must comply with 
quality-related characteristics (e.g. size, purity, and maturity) laid out in the Brazilian classification 
system, whenever a specific standard to that effect is in place.122 The importation of seeds for 
commercial purposes is strictly limited to the species and varieties contained in the National Register of Plant Varieties (RNC) maintained by MAPA.
123 The conformity of imports is verified at 
the border, either by MAPA or by accredited private companies.124  
3.93.  The requirements laid out by MAPA for importation of products of animal origin into Brazil 
include: (i) recognition of the sanitary inspection systems in the exporting country as equivalent to Brazil's; (ii) accreditation of the exporting establishments; and (iii) approval of the products and 
their labels.
125 The requirements for importation of aquatic animals and reproductive material 
include: (i) recognition of the aquatic animal health system (natural or reproduction environments) in the exporting country as equivalent to Brazil 's; and (ii) when deemed necessary, import risk 
analysis. All imports of animal products and their sub-products must be inspected at the port of 
entry. In principle, physical inspections are perf ormed on 1% of the lot comprising all packages 
classifiable under the same tariff line, with a minimum of two and a maximum of ten packages. For 
products in bulk, five samples are collected separately for inspection; different rules apply for 
containers. Samples from the packages that were physically inspected may also be used for laboratory testing; testing requirements are product-specific and do not follow a general rule. Testing should be carried out at MAPA laboratories; when necessary, laboratories officially 
accredited by MAPA may also be used. Testing costs are paid by the owner of the products.
126 
3.94.  Establishments that produce, import, or export fertilizers, as well as the products 
themselves, must be registered with MAPA. The Mi nistry also maintains a register of pesticides 
(AGROFIT), which incorporates relevant information from the Ministries of Health and 
Environment.  
3.95.  Brazil prohibits imports, exports, an d the domestic commercialization of hormonal 
substances with anabolic characteristics, unless intended for therapeutic and research use.127 The 
use of substances with anabolic hormonal prop erties for the purpose of promoting growth and 
weight in bovines and poultry destined for slaughter is banned; imports of hormone-treated meat are also prohibited.
128 
3.2.10  Other measures  
3.96.  Brazil observes the trade sanctions im posed by the United Nations and the regional 
organizations to which it belongs. According to the authorities, Brazil is not a party to any 
agreements or arrangements seeking to influenc e the quantity or value of goods and services 
exported to Brazil.  
3.3  Measures Directly Affecting Exports 
3.3.1  Procedures and documentation 
3.97.  Export procedures are laid out in Chapter IV of SECEX Ordinance No. 23 of 14 July 2011 of 
the Secretariat of Foreign Trade (SECEX). As is th e case for import operations, all procedures for 
the exportation of goods are carried out electronically through SISCOMEX. 
                                               
122 Law No. 9,972 of 25 May 2000 and Decree No. 6,268 of 22 November 2007. 
123 New plant varieties may be included in the register  after specific trials designed to verify their 
adaptation to Brazilian conditions (Normative Instruction No. 50 of 15 December 1998). 
124 The rules and guidelines that regulate inspections of imported plants and their products are laid out 
in Normative Instruction MAPA No. 36 of 10 November 2006 (WTO document G/SPS/N/BRA/144/Add.1 of 28 November 2006 and addenda). 
125 SDA carries out on-site inspections and sends questionnaires to the SPS authorities of the exporting 
country to evaluate the procedures followed by its counterparts; on-site inspections of the exporters' 
establishments are undertaken at the cost of the interested party. 
126 Annex of Ministerial Act MAPA No. 183 of 9 October 1998. 
127 MAPA Normative Instruction No. 55 of 1 December 2011. 
128 MAPA Normative Instruction No. 17 of 18 June 2004. WT/TPR/S/283 • Brazil 
 
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  3.98.  All exporters are automatically registered in SECEX's exporters and importers registry (REI) 
upon their first export operation. Registration in the REI is not required for exports shipped by post with a value of less than US$50,000 (or equivale nt amount in another currency), with certain 
exceptions (e.g. exports under special customs regimes). From 1 February 2012, a new SISCOMEX 
module is available for exporters. 
3.99.  All export goods must be registered in the export registry (RE) prior to submission of the 
export declaration. The RE is requested by the exporters or their representatives through 
SISCOMEX, and if all required information is complete and correct, registration will be issued 
within a maximum of 30 days. For financed exports (sales on terms exceeding 360 days or with interests) a credit register (RC) is required in order to register the goods in the RE. Annex XV of 
SECEX Ordinance No. 23 of 14 July 2011 contains a list of exports exempted from export 
registration requirements.
129 A simplified export declaration is available for exports up 
to US$50,000.  
3.100.  Export documentation is processed through SISCOMEX and analysed by the relevant 
control agencies before the merchandise is loaded for exportation, except in certain cases.130 The 
export documents required include an export declaration, bill of lading, packing list, letter of credit (if required), commercial invoice, and, in some cases, an export licence (see below).
131 In addition, 
certificates of origin are required for preferential exports to MERCOSUR and LAIA countries, as well 
a s  u n d e r  t h e  G S P  a n d  G S T P  s c h e m e s .  C e r t i f i c a t e s  o f  o r i g i n  f o r  M E R C O S U R  a n d  L A I A  m u s t  b e  issued by entities authorized by the SECEX
132; certificates of origin for GSP, and for preferential 
poultry exports to the EU are issued by the Banco do Brasil  S.A.; and certificates of origin for the 
GSTP are issued by several Brazilian industry federations. Preferential exports of milk to Colombia 
require a MERCOSUR quota authorization certificat e and preferential exports of sugar to the EU 
require a certificate of origin; both are issued by the Department of Foreign Trade (DECEX). A 
certificate of authenticity is required for tobacco exports to the EU, which is issued by the Banco do 
Brasil S.A. and the industrial federations of th e State of Paraná, Santa Catarina, and Rio Grande 
do Sul.133  
3.101.  A number of products are subject to specia l export procedures, including exports subject to 
specific standardization and classification requirements, export taxes, export licences, or country-specific tariff quotas in certain markets under Brazil's international agreements. Annex XVII of SECEX Ordinance No. 23 of 14 July 2011 contains a list of goods subject to special export 
procedures.
134 Since Brazil's last Review, two produc ts have been removed from the list.135  
3.102.  As of March 2008, Brazilian exporters of  goods and services are allowed to maintain 
abroad the totality of their export proceeds.136 However, exporters must inform the Federal 
Revenue about the origin and use of export proceeds kept abroad and may not use them for 
                                               
129 These include exports with a value equal to or less than US$50,000; samples with no commercial 
value;  luggage; domestic animals; and goods bought in Brazil by non-residents. In addition, under SECEX 
Ordinance No. 42 of 7 December 2011, exports up to a value of US$50,000 and financed with PROEX funds 
(see below) are exempt fro m registration in the RE if they us e a simplified export declaration. 
130 The exceptions are exports of fuel and food to airl ines and ships in international traffic, and domestic 
sales of precious stones and jewellery to non-residents,  as provided in Annex XVI of SECEX Ordinance No. 23 
of 14 July 2011. 
131 A simplified export declaration is available for exports with a value of up to US$50,000 (Normative 
Instruction No. 611 of 2006). 
132 The entities authorized by SECEX are listed in Annex XXII of SECEX Ordinance No. 23 of 
14 July 2011 and its amendments: SECEX Ordinance No. 45 of 23 December 2011; SECEX Ordinance No. 2 of 17 January 2012; SECEX Ordinance No. 11 of 4 April 2012; and SECEX Ordinance No. 15 of 17 April 2012. 
133 SECEX Circular No. 9 of 11 February 2009. 
134 These include: exports of certai n types of bovine meat to the EU under the "Hilton quota"; and 
exports of poultry meat and poultry meat preparations  to the EU subject to country-specific tariff quotas; 
exports of sugar and confectionery prod ucts to the EU subject to export licences; milk exported to Colombia 
under MERCOSUR quota; frozen lobster, pine wood, granit e in block, and marble (all four products subject to 
standardization); cigarettes, and  skins and hides subject to export tax; precious stones, which may be sold in 
foreign currency to non-residents; and arms and ammuni tion subject to export tax and other restrictions. 
135 Coffee (HS 0901.11.10), and ethylic alcohol (HS 2207.10.00 and 2207.20.10). 
136 Central Bank of Brazil, RMCCI-In ternational Capital and Foreign Exch ange Market Regulation, Circular 
No. 3,548 of 12 March 2008. WT/TPR/S/283 • Brazil 
 
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  loans.137 When the exporter decides to repatriate the export proceeds, a foreign exchange contract 
must be signed with a financial institution authorized by the Central Bank.138  
3.3.2  Export taxes 3.103.  Law No. 9,716 of 26 November 1998 and Decree No. 6,759 of 5 February 2009 provide for 
the application of an export tax of 30%, which may be decreased or increased (up to 150%) by 
the Foreign Trade Chamber (CAMEX) in order to address foreign exchange or trade policy objectives. In practice, the export tax is zero-rated, except on a few products (Table 3.6). The 
basis for assessing the export tax is the f.o.b. va lue or the price of the good in the international 
market at the time of exportation.
139 The price must not be lower than the cost of acquisition or 
production of the good, increased by taxes and ot her contributions and a profit margin of 15% on 
the sum of costs and taxes. 
Table 3.6 Export taxes, 2008-11 
HS Heading Products Destination Rate 
(%) Legislation Situation 
as at 
August 
2011 
2402.20.00 Cigarettes 
containing tobacco South and 
Central America and the Caribbean 150 Decree No. 2,876, 14/12/98 In place 
4101, 4102, 
4103, 4104.11, 
4104.19 Raw hides and 
skins (bovine, 
equine, sheep or 
lamb) Any country 9 CAMEX Resolution No. 42, 19/12/06 In place 
Chapter 93 Arms and 
ammunition, parts and accessories 
thereof
a South and 
Central America and the 
Caribbeanb 150 CAMEX Resolution No. 17, 06/06/01 
CAMEX Resolution No. 88, 14/12/10 In place 
a Except when destined to authorized consumers and to the military and police  forces; fire -arms under 
HS 9302.00.000 (MERCOSUR classification NCM 9303) with intrinsic safety and identification 
features, arms and ammunition under HS 9304. 00.00 (NCM 9306.29.00), and ammunition under 
NCM 9306.21.00, 9306.29.00, and 9306.30.00. 
b Excluding Argentina, Chile, and Ecuador. 
Source: Information provided by the Brazilian authorities. 
3.104.  During the review period, Brazil maintain ed unchanged the export taxes it applies on: raw 
hides and skins, cigarettes, and arms and ammuniti on. In the case of raw hides and skins, taxes 
apply on all exports with the stated purpose of ensuring supply to the domestic market. In the 
case of cigarettes and arms and ammunition, taxes are charged only on exports to certain destinations in order to control the regularity of trade flows. Export tax revenues amounted to R$34.1 million (some US$18.6 million) in  2008, and R$41.5 millio n (US$24.8 million) 
in 2011.
140 
3.105.  There are no minimum export prices, except  as a basis for calculating the export tax. The 
registry of sale, in which certain produc ts had to be inscribed, was revoked in 2008.141 
3.106.  Exports are exempted from the Tax on Indu strial Products (IPI), the Contribution to the 
Social Integration Programme (PIS), the Contribution to Social Security Financing (COFINS) and the state-level Tax on the Circulation of Goods and Services (ICMS).  
                                               
137 Central Bank of Brazil Normative In struction No. 726 of 28 February 2007. 
138 Central Bank of Brazil, RMCCI-International Ca pital and Foreign Exchange Market Regulation, 
Update 38, Circular No. 3,527 of 4 March 2011. Viewed  at: http://www.bcb.gov.br/Rex/LegCE/Ingl/Ftp/RMCCI-
1-11 I.pdf [24 July 2012]. 
139 Decree-Law No. 1,578 of 1977 and Provisional Measure No. 2,158-35 of 2001. 
140 Ministry of finance online information. Viewed  at: http://www.stn.fazend a.gov.br/contabilidade_ 
governamental/execucao_orcamentaria_do_GF/Receita_Tributaa.xls [July 2012]. 
141 SECEX Ordinance No. 23 of 31 October 2008. WT/TPR/S/283 • Brazil 
 
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  3.3.3  Export prohibitions, restrictions, and licensing  
3.3.3.1  Export prohibitions 3.107.  Exports of some products are prohibited  for reasons of environmental protection and 
compliance with international agreements. Exports of some organic chemicals (included in HS 
Chapter 29) to non-signatories of the Montreal Protocol are prohibited. Exports of wood in the 
rough (HS 4403) are generally suspended unless certain conditions are met, and require the approval of the Brazilian Institute of the Envi ronment and Renewable Natu ral Resources (IBAMA). 
Exports of raw leather of amphibians and reptiles are also prohibited.
142 In accordance with United 
Nations Resolutions, Brazil prohibits exports of weapons and military equipment to the Democratic 
Republic of Congo, the Democratic People's Republic of Korea, Eritrea, Iraq, Ivory Coast, Liberia, Libya, Sierra Leone, Somalia, and Sudan, as well as exports of materials and technology that could 
lead to the development of nuclear weapons to Iran.
143 
3.3.3.2  Export restrictions, quotas, and licences  3.108.  Exports of "sensitive products" are subject to control by the Inter-Ministerial Commission 
for the Export Control of Sensitive Goods (CIBES) under Law No. 9,112 of 10 October 1995.
144 The 
CIBES is responsible for preparing regulations, criteria, procedures, and control mechanisms for 
the exportation of sensitive products and their related services. Law No. 9,112 defines as 
sensitive: double-use goods that could be utilized for war purposes; goods of use in nuclear 
activities and equipment, chemical or biological goods that may be used for war purposes; and services directly linked to the production or use of a sensitive good. Exporters of sensitive products 
must apply to the CIBES for a licence which will take into account the international conventions 
and regimes related to chemical, biological, nuclear, and missile technologies. The lists of 
controlled products and services are prepared, updated, and approved by the CIBES.
145  
3.109.  Some products listed in Annex XVII of SECEX Ordinance No. 23 of 14 July 2011 are subject 
to tariff quotas/licences when exported to certain markets. These include exports of some types of 
bovine meat146 and poultry products147, and exports of sugar148 to the EU. Quotas are 
administered on a first-come-first-served basis through an export licensing procedure managed by 
the DECEX. In the case of bovine and poultry meat, the producers must be accredited by the 
Ministry of Agriculture (MAPA) and accepted by the EU as safe exporters in order to obtain a quota. Exports of milk (HS 0402) to Colombia must obtain a MERCOSUR quota authorization from DECEX in order to benefit from the access conditions under the Economic Complementary 
Agreement.  
3.110.  Exports of certain wood (pine, imbuia, and virola) are subject to specific rules and require 
prior authorization from the IBAMA. Exports of mahogany, Brazil wood, and cedar require CITES 
permission, which is issued by the IBAMA. Ex ports of jacaranda from Bahia (HS 4407.29.90) are 
subject to special rules on the grounds that this wood is becoming extinct. Normative Instruction 
No. 77 of 7 December 2005 establishes the procedures for exporting wood products and 
sub-products, including pine, imbuia, and virola . Exports of rough diamonds require a Kimberley 
Certificate. 
3.111.  Exports of a relatively large number of products require prior authorization from the 
relevant government agencies, mainly for safety, health, security, or environmental reasons, or 
when they are subject to export quotas. As at 30 December 2010 (latest information available), 
the list included some 1,055 tariff headings at the HS eight-digit level (HS 2007), representing 
                                               
142 Article 18 of Law No. 5,197 of 3 January 1967. 
143 Article 254 of SECEX Ordinance No. 23 of 14 July 2011. 
144 The CIBES was created by Law No. 9,112 of 10 October 1995, as amended by Decree No. 4,214 of 
30 April 2002. Headed by the Ministry of Science and Technology, CIBES is also integrated by the Ministries of Defence, External Relations, Justice, Finance, and the MDIC. 
145 For the lists of controlled sensitive goods, see Mini stry of Science and Technolo gy online information.  
Viewed at: http://www.mct.gov.br/index.php/content/view/330710.html. 
146 HS 0201.30.00; 0202.30.00; 0206.10.00; and 0206.29.90. 
147 HS 02.10.99.00; HS 1602.31.00 and 1602.32.20. 
148 HS 1701.13.00 and 1701.14.00. WT/TPR/S/283 • Brazil 
 
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  around 10% of all tariff headings and involving 53 HS Chapters.149 Products subject to prior export 
authorization are mainly organic and inorganic chemicals (55% of the products), pharmaceuticals, wood products, some vehicles and aircraft, mineral fuels, fish and crustaceans, raw hides and skins, arms and ammunition, and live animals. Wild animal leather products are subject to 
authorization from IBAMA on grounds of native fauna protection. Several agencies are responsible 
for issuing licences; and some products requ ire authorization by more than one agency.
150 
3.3.4  Export support and related tax measures 
3.112.  Brazil maintains a number of programmes designed to increase the competitiveness of 
export-oriented companies, in particular small- scale enterprises, and to boost exports. The 
authorities consider that ensuring tax neutrality for exports is a key element in this regard, and that this objective is served through the exemption of indirect taxes on exports, and the 
implementation of schemes such as the drawback system (which now also covers the purchase of 
local inputs for the production of exports), export  processing zones, and other export-related duty 
and tax concessions. Since the last Review of Brazil, several export support programmes have 
been modified or expanded, and others have been introduced (e.g. Reintegra ).  
3.3.4.1  Export subsidies 3.113.  Prior to this Review, the procedures of  the Export Financing Programme (PROEX) were 
modified as a consequence of a WTO dispute settlement ruling that found that the manner in 
which they were applied to regional aircraft exports constituted an export subsidy.
151  
3.114.  In March 2009, Brazil notified the WTO Committee on Agriculture that it had not granted 
export subsidies to agricultural products in calendar years 2002 to 2007.152 In a further 
notification, Brazil submitted that it had not granted agricultural export subsidies during the 
period 2008-10.153 
3.3.4.2  Reintegra  programme 
3.115.  Law No. 12,546 of 14 December 2011 introduced the Special Regime for the 
Reimbursement of Taxes for Exporters, known as Reintegra . The programme enables exporters of 
manufactured goods to recover residual indirect tax costs levied on the production chain, such as 
the Tax on Services (ISS), the financial transaction tax (IOF), and the royalty tax (CIDE). 
Companies that export goods manufactured in Brazil are entitled to a refund of up to 3% of their gross receipts from exports, to be used either as a credit against federal tax liabilities, or as a cash payment. 
3.116.  In order to qualify under Reintegra , manufactured goods must: (i) be included in the 
Industrialized Products Tax Table ( Tabela de Incidência do Imposto sobre Produtos 
Industrializados –  TIPI) and listed in an act issued by the Executive branch; and (ii) the cost of the 
imported content of the goods must not exceed a percentage of their export price. Decree 
No. 7.633 of 1 December 2011 provides a list of eligible goods
154 and sets the maximum value of 
imported content at 40% for most products, except in the case of high-tech goods (e.g. 
pharmaceuticals, electronics, and aircraft and parts), which may have up to 65% of imported 
                                               
149 At the ten-digit level, the list covers 1,420 HS 2007 heading subdivisions (MDIC online information.  
Viewed at: http://www.desenvolvimento.gov.br/arquivos/dwnl_1293734870.pdf [July 2012]). 
150 The main agencies in charge of issuing export lice nces are: the National Agency for Electrical Energy 
(ANEEL), the National Agency  for Petroleum, Natural Gas and Biofuels (ANP), the Brazilian Health Surveillance 
Agency (ANVISA), the National Commission of Nuclear Energy (CNEN), the Army Command, Ministry of Defence (COMEXE), the DECEX, the Directorate for the Supe rvision of Controlled Products (DFPC), the National 
Department of Mineral Production (DNP M), the Federal Police Department (DPF), the Brazilian Institute of the 
Environment and Renewable Natural Resources (IBAMA); the Ministry of Science an d Technology (MCT), and 
the Ministry of Defe nce (MDIC online information.  Viewed at: http://www.desenv olvimento.gov.br/arquivos/ 
dwnl_122823 4625.xls [July 2012]). 
151 WTO document WT/DS46/R, 14 April 1999.  See also WTO (2009). 
152 WTO document G/AG/N/BRA/25, 16 March 2009. 
153 WTO document G/AG/BRA/28, 12 October 2012. 
154 The list covers almost all HS Chapters of the manufacturing sector and over 8,500 tariff lines. WT/TPR/S/283 • Brazil 
 
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  inputs.155 Eligible exports include direct sales of goods abroad as well as sales to qualified domestic 
trading companies (ECEs), but ECEs themselves are not eligible. Imported goods do not benefit from the programme. Reintegra benefits were applied to exports made until 31 December 2012.
156 
The authorities estimate that revenue forgone for the duration of this programme was about 
R$6.96 billion. There are no plans to extend it.  
3.3.4.3  Drawback 3.117.  Brazil operates a drawback scheme designed to reduce the tax costs associated with inputs 
used in the production of goods for export.
157 The scheme provides for the suspension or 
exemption of import tariffs and indirect taxes such as IPI, PIS, COFINS, ICMS, and AFRMM levied on local or imported inputs and parts used to produce exportable goods.  
3.118.  Since Brazil's last Review, the drawba ck system has been modified and expanded. 
In March 2010, the Federal Revenue and the SECEX published RFB/SECEX No. 467 
of 25 March 2010, regulating the new integrated  drawback regime. The scheme allows for the 
suspension or exemption of taxes not only on imported inputs, but also on the local purchase of 
inputs to be used in the production of exports, including for repair, breeding, cultivation or 
extractive activities of the products to be exported. RFB/SECEX No. 467/2010 also extends the benefits of the scheme to enterprises that purchase local or imported goods to produce 
intermediate goods to be used by another enterprise  in the production of final products for export 
(intermediate drawback). On 27 July 2010, Provisional Measure No. 497 further expanded the scope of the integrated drawback regime to in clude the "exemption" modality (see below). The 
procedures for granting the drawback scheme were consolidated in SECEX Ordinance No. 23 of 
14 July 2011. Users of the integrated drawback regime include agri-business, industrial, and 
commercial enterprises engaging in foreign trade. Physical persons are not eligible under the scheme. 
3.119.  The integrated drawback regime has two main modalities: suspension and exemption. 
Both modalities are operated by SECEX throug h the SISCOMEX system. The suspension modality 
consists in deferring payment of import duties and federal indirect taxes on imported goods and/or 
local goods to be exported after transformation, assembly, improvement or renovation.
158 The 
suspension is granted for one year, renewable fo r an equal period. Moreover, the suspension may 
be extended up to a maximum of five years, when  the imported and/or local inputs are used to 
produce capital goods with a long production cycle. Between 2006 and 2010, exports under the 
suspension modality of the drawback scheme repr esented over a quarter of total exports. The 
authorities indicated that exports under this scheme totalled more than US$45 billion in 2010, 
US$59 billion in 2011, and US$48.6 billion in 2012.  
3.120.  The exemption modality of the integrated drawback scheme provides for the rebuilding of 
stocks, free of import duties and indirect taxes, of both imported and local inputs, in a quantity and quality equivalent to those used in the manufacture of a product already exported.
159 The 
exemption also applies to purchases of local or imported goods equivalent to those used in 
repairing, breeding cultivation, or extractive activities connected with the exported product; as well as to the re-stocking of inputs used for intermediate products. The duty/tax exemption may be claimed after exportation of the final product, but no later than two years after the date of 
purchase or importation of the inputs for which duties and taxes were paid. Once the drawback 
authorization has been granted by SECEX, the bene ficiary has a period of one year to purchase 
local or imported inputs in order to rebuild stoc k; this period may be renewed for another year.  
                                               
155 Decree No. 7.633 of 1 December 2011. Viewed at: http://www.planalto.gov.br/ccivil_03/_Ato2011-
2014/2011/decreto/D7633.htm [July 2012]. 
156 Article 3 Law No. 12,546 of 14 December 2011. 
157 The drawback scheme was created in 1966 by Decree-Law No. 37 of 18 November 1966. 
158 The legal basis for the integrated drawback regi me in its suspension modality is Law No. 11.945 
of 4 June 2009, and is regulated by RFB/SECEX No. 467 of 25 March 2010. 
159 The exemption modality was instituted by Law No. 12.350 of 20 December 2010 (based on Article 9 
of Provisional Measure No. 497 of 27 July 2010), and is regulated by RFB/SECEX No. 3 of 17 December 2010. WT/TPR/S/283 • Brazil 
 
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  3.121.  During 2008-11, the revenue forgone under the drawback suspension modality amounted 
to R$5.4 billion and to R$256.9 million under the exemption modality.160 
3.3.4.4  Special System of In dustrial Depots subject to Standardized Control (RECOF) 
3.122.  Brazil continues to apply the RECOF, introduced by Decree No. 2,412 of 12 March 1997, 
and regulated by Normative Instruction No. 757 of 25 July 2007, as modified by subsequent 
normative instructions issued by the Federal Revenue Secretariat.161  
3.123.  RECOF allows for the suspension of import duties and indirect taxes (IPI, PIS, COFINS) on 
the purchase of imported or local inputs for the in dustrial transformation of products destined for 
export or the domestic market. The suspension is for one year, with the possibility of an extension 
for an additional year.162 Products imported under RECOF also benefit from expedited customs 
clearance procedures. RECOF's scope is limited to assembly, transformation, and reconditioning 
activities in: (i) aeronautics; (ii) automotive; (iii) information and telecommunications; 
and (iv) semiconductors and high-technology components for the electronics industry.163 Only the 
products listed in Annex I to Normative Instruction No. 757/2007 are eligible under RECOF. 
3.124.  The Federal Revenue Secretariat administers the RECOF scheme and grants the 
suspension authorizations to importers. To qualify, companies must have capital equal to or above R$25 million. Beneficiaries must export products using the goods imported under RECOF for a 
value of at least 50% of the total value of imports acquired under the scheme
164, and not less than 
US$10 million for companies in the informatics and semiconductor industries, and US$20 million for companies in the aeronautics and automotive industries. Companies must also commit to the industrial transformation of at least 80% of the goods imported under the regime (this is 
equivalent to a cap on sales of the imported goods to the domestic market). This percentage may 
be reduced to 75% if the enterprise exports, using the goods imported under RECOF, for a value of over US$50,000, and to 70% if it exports over US$100,000. 
3.125.  Domestic sales of the goods imported under the RECOF regime are subject to all taxes 
applicable on importation or domestic purchase, which must be paid with interest at SELIC rates and applicable penalties in accordance with legal provisions. The authorities indicated that 
during 2008-11, revenue forgone under the RECOF scheme amounted to almost R$6.5 billion. 
3.3.4.5  Special Regime for the Purchase of Capital Goods for Exporting Enterprises 
(RECAP) 
3.126.  The RECAP allows for the suspension of the PIS and the COFINS on the purchase of new 
local or imported capital goods (machines, equipment, and instruments), which must be 
incorporated in the beneficiary company's fixed assets.
165 In order to benefit from RECAP, an 
enterprise must have exported at least 50% of its gross income from sales of goods and services 
in the calendar year preceding its request to use the scheme, and commit to comply with such 
export requirement for the following two calendar years.166 Start-up enterprises that did not 
achieve the 50% export requirement in the previo us year may benefit from the scheme if they 
commit to comply with such requirement over three years. Brazilian shipyards are also eligible for 
RECAP benefits, irrespective of their export turnover, and do not need to undertake export 
                                               
160 Information provided by the Brazilian authorities. 
161 Ministry of Finance online in formation.  Viewed at: http:// www.receita.fazend a.gov.br/recof. 
[July 2012]. 
162 The period of suspension may be extended for a maximum of five years for imported goods used in 
the manufacture of goods with a long production cycl e.  Normative Instruction No. 886 of 6 November 2008. 
163 The main products imported under the RECOF scheme are under H.S. codes: 8708; 8411; 8542; 
8803; 8517; 8483; 8409; 8431; 9032; 8473; 880330; 841191; 851770; 841112; 854231; 870840; 854239; 870829; 843149; 903289.   
164 Normative Instruction RFB No. 963 of 14 August 2009 allows companies to comply with this 50% 
obligation gradually over five years.   
165 RECAP was instituted by Law No. 11.196 of 21 November 2005 (as amended), and is regulated by 
Decree No. 5.649 of 29 December 2005 and Normative Instruction SRF No. 605 of 4 January 2006. 
166 The export requirement of 50% of gross income from sales of goods and services applies as of 
1 January 2013, as established by Provisional Measure No. 563 of 3 April 2012. Originally, the export 
requirement was set at 80% (Law No. 11.196 of 21 November 2005 and Decree No. 5.649 of 29 December 2005). It was reduced to 70% by Decree No. 6,887 of 25 June 2009, and then to 50% in 2012. WT/TPR/S/283 • Brazil 
 
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  commitments.167 The Federal Revenue Secretariat administers the RECAP scheme. As 
of February 2012, some 265 companies were benefiting from RECAP.  
3.3.4.6  Definition of Predominan tly Export-oriented Enterprises  
3.127.  Enterprises that produce predominantly fo r export may apply for suspension of the PIS, 
COFINS, and IPI taxes on the purchase of inputs, whether local or imported, or otherwise apply for 
a special regime such as the RECAP. A company is  deemed to be a predominantly export-oriented 
enterprise, if it exports more than 50% of its gross income from sales of goods and services.168 If 
this condition is not met, the suspended taxes must be paid, with penalty and interest on arrears. 
3.3.4.7  Special Regime for the Information Technology Exportation Platform (REPES)  
3.128.  The REPES suspends the PIS and COFIN taxes on purchases of new local or imported 
goods, and local or imported information technology services, as well as the IPI tax on imports of 
new goods (when there are no equivalent domestic products) for their incorporation as fixed 
assets. Beneficiary companies must be dedicated exclusively to the development of software and 
the provision of IT services, and commit to export software and IT services for at least 80% of 
their annual gross income.169  
3.3.4.8  Export-processing zones 3.129.  The legal framework for export-processing zones (EPZs) in Brazil includes Law No. 11,508 
of 20 July 2007, as amended by Law No. 11,732 of 30 June 2008, and Law No. 12,507 of 
11 October 2011
170, as well as Decree No. 6,634 of 5 November 2008, Decree No. 6,814 
of 6 April 2009, Normative Instruction RFB No. 952 of 2 July 2009, and CZPE Resolutions. The 
enterprises located in EPZs benefit from fiscal and administrative incentives, which are legally 
guaranteed for 20 years (legal guarantee clause). 
3.130.  Authorized EPZ companies may import or purchase in the local market goods and services 
with suspension of import duties and the IPI,  COFINS, PIS, and AFRMM taxes. The suspension 
applies to both new and used capital goods to be incorporated as fixed assets of the enterprises 
operating in the EPZs. The beneficiaries are exempt from import licence requirements or any other federal agency authorization for imports and exports, except for those related to sanitary controls, 
national security, and environmental protection. Law No. 11,732 of 30 June 2008 allows for the 
application of additional fiscal benefits for enterprises located in the SUDENE and SUDAM areas, including a reduction of the corporate income tax and accelerated depreciation.
171 
3.131.  Companies in EPZs must export at least 80% of their gross income from sales of goods 
and services.172 P r o d u c t s  s o l d  i n  t h e  d o m e s t i c  m a r k e t ,  a s  w e l l  a s  g o o d s  a n d  s e r v i c e s  u s e d  a s  
inputs in the production of those domestic sales, are subject to all taxes imposed on domestic acquisition or importation. All taxes must be paid with interest at the SELIC rate. 
3.132.  The National Council of Export Processing  Zones (CZPE) oversees the implementation of 
Brazil's EPZ policy and is responsible for granting companies authorization to establish in EPZs. Authorizations are valid for 20 years, renewable for the same number of years in the case of 
investments requiring long amortization periods. Companies that wish to establish in an EPZ must 
submit an application to the CZPE in accordance  with the procedures laid out in Decree No. 6,814 
of 6 April 2009 and Resolution CZPE No. 5 of 28 Se ptember 2011. Proposals for the creation of an 
EPZ are to be submitted by state or municipal authorities to the CZPE. Permission from the 
Brazilian customs authority is also required for the operation of an EPZ. Final approval rests with 
the President of the Republic. Approved EPZs that fa il to start operations within 24 months of their 
                                               
167 Article 6 and Article 7 of Normative Instruction SRF No. 605 of 4 January 2006. 
168 Article 29 of Law 10,637 of 30 December 2002; Article 40 of Law 10,865 of 30 April 2004; and 
Article 13 of Law 11.196 of 21 November 2005. 
169 Law No. 11,196 of 21 November 2005 provides the legal basis for the REPES scheme, and it is 
regulated by Normative Instruction SRF No. 630 of 15 March 2006. 
170 Law No. 12,507 of 11 October 2011 extended from 12 to 24 months the time-limit for beginning 
work for the establis hment of an EPZ. 
171 Article 2 of Law No. 11,732 of 30 June 2008, which modifies Article 18 of Law No. 11,508 of 2007. 
172 Article 18 of Law 11,508 of 20 July 2007, as amended by Law No. 11,732 of 30 June 2008. WT/TPR/S/283 • Brazil 
 
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  agreed installation timetable may lose their right to establish.173 As of December 2012, there were 
24 approved projects for the creation of EPZs at different stages of development, of which nine 
were located in the north-east of Brazil. None had started operations.  
3.3.5  Export finance, insurance, and guarantees 
3.3.5.1  Overview 
3.133.  A number of export finance, insurance,  and guarantee schemes are available to help 
Brazilian exporters of goods and services gain access to credit at attractive conditions, i.e., on 
terms similar to those obtainable in the international market. Among the main instruments are the 
Export Financing Programme (PROEX) and several export credit schemes operated under the BNDES-EXIM programme.  
3.134.  BNDES-EXIM programmes are geared to promote exports with local value added. The 
stated conditions to participate in some of these programmes include domestic content/production 
thresholds.
174 The Brazilian authorities have emphasized th at these conditions apply only to qualify 
automatically for financing, and that products that do not meet these conditions may also benefit 
from the programmes subject to a non-automatic analysis procedure. All exporting companies, 
regardless of size, are eligible to apply for BNDES-EXIM financing, however MSMEs are granted special conditions under certain schemes, and some programmes are targeted at specific sectors 
(e.g. automobiles, aviation, pharmaceuticals). During the review period, BNDES introduced or 
re-launched two additional export financing facilities: the PSI-Export Pre-shipment programme to encourage exports of capital goods, and the Re vitalize Exports scheme to support exporters 
adversely affected by the international economic crisis.  
3.3.5.2  Export Financing Programme (PROEX)  
3.135.  The PROEX is one of Brazil's most impo rtant support schemes for exporters of goods and 
services. The programme is aimed at providing credit, at conditions similar to those prevailing in 
international markets, for companies that would otherwise find it difficult to obtain it, or would be 
able to do so only at higher interest rates in the domestic market. PROEX is a federal government programme administered by the Banco do Brasil S.A. It is predominantly, but not exclusively, 
targeted at small and medium-sized enterprises involved in international trade.  
3.136.  The Export Financing and Guarantee Committee (COFIG), created by Decree No. 4,993 
of 18 February 2004, as part of CAMEX, is in ch arge of overseeing the operations of the PROEX 
and the Export Guarantee Fund (FGE, see below), and establishing the parameters and conditions 
for granting financial assistance. COFIG is chaired by a representative of the MDIC, and has 
representatives from other government bodies, su ch as the Ministries of Finance and External 
Relations. 
3.137.  PROEX has two main modalities: direct financing (PROEX Financing) and interest rate 
equalization (PROEX Equalization). In 2012, ex port operations under the programme totalled 
US$4.88 billion: US$495.4 million under PROEX Financing and US$4.39 billion under PROEX 
Equalization.
175  
3.138.  PROEX Financing provides direct credit to the exporter or importer of Brazilian goods and 
services with funds from the Treasury. It is main ly designed to support micro, small, and medium-
sized enterprises (MSEMs) with an annual turnover of up to R$600 million (about 
US$300 million).176 Financing may also be provided to larger companies on a case-by-case basis. 
Credits are granted for between 60 days and 10 year s, depending on the value of exports or the 
complexity of the service rendered. Financing is av ailable for up to 100% of the value of exports 
for credits of two years or less, and up to 85% for the rest. The interest rates are those prevailing 
in the international market; credits are in U.S. dollars or other convertible currencies. There is no 
                                               
173 Law No. 12,507 of 11 October 2011 and Law No. 12,767 of 27 December 2012. 
174 For the conditions to qualify under the BNDES-Exim programmes, see BNDES online information.  
Viewed at: http://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/Institucional/Apoio_Financeiro/Produtos/ 
BNDES_Exim/normas_exim.html [March 2013]. 
175 Information provided by Banco do Brasil S.A.  
176 Increased from R$300 million by CAMEX Resolution No. 10 of 17 February 2009.   WT/TPR/S/283 • Brazil 
 
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  minimum value for individual export operations to be financed. In 2012, PROEX Financing covered 
875 transactions and served 205 exporters. The main sectors benefiting from this modality were agri-business (56%), textiles, leathers, and shoe s (21%), and machines and equipment (8%). The 
main markets for exports under this modality were Cuba, Germany, and China.
177  
3.139.  PROEX Equalization pays part of the cost of the export credit provided by financial 
institutions in Brazil or abroad, so as to make interest rates equivalent to those in the international market. This modality applies to Brazilian exporting firms, irrespective of their size, that have 
obtained funding from a financial institution. Exports may be financed for up to 100% of their 
value, and the percentage eligible for equalization has recently been raised to 100% of the value of exports. The period of equalization varies between 60 days and 15 years (recently increased 
from 10 years), depending on the value of export s and the complexity of the services rendered 
(see below). The financing conditions (interest rates, terms, financing percentage, and 
guarantees) are negotiated between the banks and th e exporter. Equalization is paid to the banks 
granting the export credit through the issue of National Treasury Notes (NTN-I). In 2012, 
some 2,119 operations involving 38 exporters were undertaken under PROEX Equalization. The 
sectors benefiting from this modality were machines and equipment (57%), services (26%), and transport equipment (17%); the main destinations were the United States, Angola, Peru, and 
Chile.
178  
3.140.  During the period under review, PROEX wa s modified several times to increase its scope 
and make it more accessible to exporters. CAMEX Resolution No. 45 of 26 August 2009 opened the possibility for financing the production of goods and services for export (pre-shipment financing), 
specifically targeted at MSEMs with an annual turnov er of up to R$60 million and exports of up to 
US$1 million. Under this facility, which is not yet operational, credits may be granted for up to 100% of the export value, with a maximum term of 180 days.
179 Prior to this modification only 
post-shipment financing was permitted. Under SECEX Ordinance No. 42 of 7 December 2011, 
PROEX was extended to cover export operations made through the simplified export declaration. PROEX Financing and Equalization are limited to capital goods when the product is exported to 
MERCOSUR member states.
180 
3.141.  In the framework of the Plano  Brasil Maior , in April 2012 the Federal Government 
announced a number of measures to increase the competitiveness of Brazilian exports, partly affected by the appreciation of the Brazilian real.
181 These measures include a substantial increase 
in the resources allocated to PROEX, from R$1.2 billion to R$3.1 billion, and changes designed to 
simplify its implementation. With respect to PROEX Equalization, the maximum period of equalization was increased from 10 to 15 years an d the percentage eligible for equalization was 
raised from 85% to 100% of the value of exports. Also, the limit for credit operations that do not 
require approval from the COFIG was increased from US$10 million to US$20 million. As regards PROEX Financing, new flexibilities were introduced to allow companies with a turnover of up 
to R$3.6 million to provide their own credit guarantees for export operations of less 
than US$50,000.
182 At the time of writing, such credit guarantees had not been implemented yet.  
3.3.5.3  Export Financing Fund (FFEX)  3.142.  Law No. 12,545 of 14 December 2011 authorized the Federal Government to participate in 
the Export Financing Fund (FFEX) to finance exports of goods and services of small-scale 
companies (with a turnover of up to R$60 million). The Federal Government is authorized to make an initial contribution of R$1 billion to the FFEX, and other enterprises may also participate in the 
fund. The FFEX will follow the same procedures as PROEX Financing and will be administered by 
the Banco do Brasil S.A. In the context of the Plano  Brasil Maior , it was announced that 
R$500 million would be allocated to the FFEX. The Fund was not yet in operation at the time of 
writing this report.  
                                               
177 Information provided by Banco do Brasil S.A.  
178 Information provided by Banco do Brasil S.A.  
179 MDIC Ordinance No. 191 of 28 October 2009 established the commercial conditions for pre-shipment 
financing, while the products and services eligible under this facility are listed in an Annex to MDIC Ordinance 
No. 208 of 20 October 2010. 
180 MDIC Ordinance No. 208 of 20 October 2010. 
181 Provisional Measures No. 563 and No. 564 of 3 April 2012. 
182 For more details on the Plano Brasil Maior  see MDIC online information at: http://www.desen 
volvimento.gov.br/cbapl/public/data/arquivos/documentos/e80392fecd21ee94e8a42ce0b9a53b55.pdf. WT/TPR/S/283 • Brazil 
 
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  3.3.5.4  BNDES export financing programmes 
3.143.  BNDES operates several export financing programmes. One of the main programmes is 
BNDES-EXIM, which grants pre-shipment and post-shipment credits for Brazilian exports of goods and services. BNDES-EXIM has several sub-programmes or financing modalities. Generally, eligible 
goods are those listed in BNDES Circular No. 74/2012 of 27 December 2012, although some 
programmes target specific products or industries  (e.g. automobiles and the aviation industry). 
The list of eligible goods comprises three groups of products, which cover about 70% of Brazilian 
tariff lines. The conditions to benefit from some of BNDES-EXIM programmes include meeting a 
certain index of nationalization (usually 60% defined in value and/or weight terms); domestic production thresholds (PPB), or other criteria established by BNDES (Table A3.1).
183 The Brazilian 
authorities have emphasized that these conditions apply only to qualify automatically for financing, 
and that products that do not meet these conditions may also benefit from the programmes 
subject to a non-automatic analysis procedure.  
3.144.  All exporting companies, regardless of size and the origin of the capital, are eligible to 
apply for BNDES-EXIM credits, however MSMEs are granted special conditions under some 
financing modalities. Operations are conducted through accredited financial institutions, which include most banks operating in Brazil. The total financial cost for the borrower is the relevant 
interest rate plus BNDES' remuneration charges,  and the financial institution's remuneration.  
3.145.  Since Brazil's previous Review, a few new financing modalities have been added under 
BNDES-EXIM (while others have  been temporarily suspended
184). For example, the EXIM/Pro-
aviation exports subprogramme was introduced in September 2009 to finance the production of 
goods and services for export by MSMEs that form part of Brazil's aviation industry production 
chain. Financing may be granted for up to 90% of the export value, with terms for up to 
36 months. EXIM- Automático , was introduced in late 2010 to finance Brazilian exports of capital 
goods to Latin American and African countries. It consists of a credit line granted to banks located 
abroad and accredited by the BNDES. The amount of the credit line to be granted to each bank is 
defined on a case-by-case basis and up to a maximum of US$200 million. Financing is for up to 
five years at preferential interest rates. Funds are disbursed to the exporter in Brazilian currency 
after the shipment of goods. At end-May 2012, 30 banks had been granted credit lines, amounting to US$1.4 billion. The main products exported we re agricultural machinery and equipment, buses 
and trucks, generators, transformers, and telecommunication equipment.
185  
3.146.  Besides the EXIM schemes, the BNDES has implemented two additional export financing 
programmes since the last Review (Table A3.1). The PSI-Export Pre-shipment programme, launched in July 2009, finances the production of capital goods for export. Eligible products are 
those listed in Group 1 of BNDES Circular No. 74/ 2012 of 27 December 2012, with the exception of 
telephone appliances and parts thereof. Financed goods must be accredited in the BNDES FINAME programme or meet PPB criteria. Beneficiary companies must have their headquarters and 
administration in Brazil.
186 The authorities indicated that the total amount disbursed since the 
creation of the PSI-Export programme was US$16.6 billion.187 The second programme, Revitalize 
Exports, was created in 2007 but re-launched in October 2011.188 I t  i s  t a r g e t e d  a t  e x p o r t  
companies of all sizes that operate in sectors deemed to be negatively affected by the international 
economic environment, and that have their headqu arters and administration in Brazil. Annex A of 
BNDES Circular No. 47/2012 of 10 July 2012 expanded the list of eligible sectors, which includes 
                                               
183 For the conditions to qualify under the BNDES-Exim programmes, see BNDES online information.  
Viewed at: http://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/Institucional/Apoio_Financeiro/Produtos/ BNDES_Exim/normas_exim.html [March 2013]. 
184 BNDES Agile Pre-shipment and BNDES Special pre-shipment are currently suspended. 
185 BNDES online information.  Viewed at: http ://www.bndes.gov.br/Site BNDES/bndes/bndes_pt/ 
Institucional/Sala_de_Imprensa/Noticias/2012/exportacoes/20120528_bradesco.html [August 2011]. 
186 BNDES Circulars No. 27 and No. 28 of 8 May 2012 revoked the elegibility requirement under the PSI-
Export and Revitalize Export progra mmes, that companies und er foreign capital control had to perform 
activities deemed of national interest. 
187 Acceptance of new requests under the PSI-Export programme was suspended in June 2012 due to 
lack of budget resources. 
188 Support measures under the Revitalize Exports programme were authorized by Law No. 11, 529 of 
22 October 2007, which was modified by Law No. 11,945 of 4 June 2009 to include new eligible products, and regulated by BNDES Circular No. 47/2012 of 10 July 2012. WT/TPR/S/283 • Brazil 
 
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  textiles, leather, footwear, toys, fruits, automobile parts, and IT products. The Revitalize Exports 
programme has a total budget of R$3.2 billion.189 
3.147.  BNDES total disbursements for foreign trade operations amounted to US$5.4 billion 
in 2012, US$4 billion for exports of goods, and US$1.4 billion for services (Table 3.7).  
Table 3.7 BNDES total disbursements fo r exports of goods and services, 2008-12 
(US$ million) 
Year Total 
disbursements For exports of 
goods % of total 
exports of 
goods For exports of 
services % of total 
exports of 
services 
2008 6,597 5,553 2.8 1,044 3.4 
2009 8,330 6,949 4.5 1,381 4.9 
2010 11,274 10,439 5.1 835 2.6 
2011 6,716 5,130 2.0 1,586 4.1 
2012 5,463 4,023 1.6 1,445 3.6 
Source: WTO Secretariat, based on information provided by BNDES. 
3.3.5.5  Other export financing programmes  
3.148.  Exporters also benefit from programmes , provided by private banks, which allow for 
advances of export proceeds, in Brazilian currency, either at the pre-shipment or post-shipment 
phase. The ACC ( Adiantamentos sobre Contratos de Câmbio ) is an advance of funds for the 
production of goods for export on account of their shipment at a future date. Financing may be for 
up to 100% of the value of exports and for a ma ximum period of 360 days before shipment. The 
cost of financing is equivalent to the LIBOR plus spread calculated on the export value in foreign currency. The ACE ( Adiantamentos sobre Cambiais Entregues ) is an advance of funds to the 
exporter after goods have been shipped abroad, thro ugh a transfer of the rights deriving from the 
export sale to an authorized bank. Financing may be granted for up to 100% of the export value, 
and the period is limited to the last business day of the 12
th month after shipment. The cost of 
financing is determined by the bank based on the size of the enterprise and the risk involved, but 
is normally equivalent to the LIBOR plus spread calculated on the export value in foreign currency. 
All exporting companies, irrespective of size, and all types of goods may benefit from the ACC and ACE schemes.
190 A similar financing facility ( ACC Indireto ) is available for trading companies and 
producers of raw materials, inputs, and packaging materials used in the production of goods for 
export, and for exports of agricultural products.  
3.149.  PROGER Export provides export financing in local currency with resources from a workers 
fund ( Fundo de Amparo ao Trabalhador  - FAT).191 Financing may be: (i) for domestic production of 
goods for export (pre-shipment)192; or (ii) for export promotion activities (post-shipment), 
including participation in trade fairs in Brazil and abroad, shipment of samples and material promotion, etc. Beneficiaries are exporting MS MEs with an annual gross turnover of up to 
R$5 million, constituted under Brazilian laws, and having their headquarters in Brazil. The scheme 
does not apply to trading companies (ECEs). Fi nancing may be granted for up to 100% of the 
value of the project, but no more than R$250,000 per exporter, and for a maximum of 12 months. 
The cost of financing is equivalent to the TJLP plus interest. The resources are disbursed by the 
Banco do Brasil and the Caixa Econômica Federal.  
3.150.  The FAT Export fund finances pre-shipment production, including start-up capital and 
necessary inputs, of exportable goods. Financing may be granted for up to 100% of the value of 
the project, with a cap to be defined on a case-b y-case basis by the BNDES, and maturity periods 
of up to 30 months. Beneficiaries are export-oriented companies, regardless of their size, provided 
                                               
189 BNDES Circular No. 46/2012 of 9 July 2012. 
190 Banco do Brasil online information. Viewed at: http://www.bb.com.br/portalbb/page44,107,2941, 
9,1,1,2.bb?codigoMenu=135&codigoRet=2446&bread=1_2. 
191 The legal basis of the PROGER scheme is provid ed by CODEFAT Resolution No. 348 of 5 August 2003, 
CODEFAT Resolution No. 347 of 5 August 2003, and CODEFAT Resolution No. 330 of 10 July 2003. 
192 Eligible products are listed in BNDES Circular No. 31/2007 of 30 July 2007. WT/TPR/S/283 • Brazil 
 
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  they are constituted under Brazilian laws and have their headquarters in Brazil.193 The same 
conditions apply as under the BNDES pre-shipment programme. The current interest rate for credits under FAT is the TJLP plus 5.5% a year. During 2008-11, funds disbursed through the FAT Export amounted to R$3.79 billion.
194 
3.3.5.6  Export insurance and guarantees 
3.151.  The Export Credit Insurance (SCE) scheme  provides coverage for Brazilian exporters of 
goods and services against non-payment for their sales aboard. Export credit insurance is 
governed by Law No. 6,704 of 26 October 1979 and Decree No. 3,937 of 25 September 2001, as 
modified by Decree No. 6,452 of 2008, and Decr ee No. 7,333 of 19 October 2010. The SCE covers 
any exporter or financial institution that finances or refinances exports. The Brazilian Export Credit Insurance Company S.A. (SBCE) and a few other private financial institutions are authorized to 
operate the SCE scheme against commercial risk in short-term transactions (up to two years). 
Created in 1997, the SBCE is a private company, although two of its shareholders are public 
companies.
195 The SBCE offers short-term commercial risk insurance for export transactions with a 
maturity of up to 180 days, usually involving cons umer goods. For certain products, such as light 
equipment, this period may be extended to two ye ars. Coverage for commercial risk is up to 90% 
of the insured and unpaid value, and is guaranteed with the SBCE's own resources.  
3.152.  Medium and long-term insurance is provided for export contracts with a maturity 
exceeding two years, and generally involving capital goods, services, and other specific contracts. For these operations, and for political and extraordinary risks of any term, the SBCE acts as an advisor to the Federal Government and coverage is ensured through the Export Guarantee Fund. 
The authorities indicated that the value of export s covered by the Export Credit Insurance scheme 
during 2008-11 was US$25.75 billion, and the main sectors that benefited from its coverage were infrastructure, civil aircraft, and engineering.  
3.153.  The Export Guarantee fund (FGE) was crea ted by Law No. 9,818 of 23 August 1999. It is 
administered by BNDES, while CAMEX is responsible for deciding the concession of FGE-based insurance. The FGE is financed with resources from the federal budget and with proceeds and 
financial gains from the fund's own activities and financial operations. Coverage guaranteed by the 
Federal Government may be up to 95% for commercial risks, and up to 100% for political and extraordinary risks, as well as for commercial risk s in operations supported by a bank guarantee. 
Insurance coverage may also be up to 100% for exports of the aeronautics industry, subject to 
CAMEX's approval, and for export operations of  small and medium-sized firms, under certain 
conditions.
196 Insurance policies are divided into two categories: supplier's credit, issued on behalf 
of the exporter, and buyer's credit, issued on behalf of a bank.  
3.154.  Premiums are calculated on a case-by-case basis, taking into account the principal 
financed under the operation, the importer country , the nature of the risk (commercial, political 
and extraordinary), the maturity of the operation, and the debtor's financial standing. The 
authorities indicated that premiums are established according to best practices of credit risk, 
based on the Basel Accords and other references (e.g. the OECD Export Credit Arrangement).  
3.155.  As part of the Plano Brasil Maior , Provisional Measure No. 564 of 3 April 2012, converted 
into Law No. 12,712 of 13 August 2012, authorized the creation of a new agency for the 
management of funds and guarantees ( Agência Brasileira Gestora de Fundos Garantidores e 
Garantias /ABGF). Law No. 12,712 also allowed the Federal Government to participate in funds 
designed to guarantee foreign trade operations and large infrastructure projects. When 
established, the ABGF will centralize the administration of the FGE and other funds, with the aim of 
realizing economies of scale and increasing efficiency in the concession of guarantees. At the time of writing, no further measures had been taken to establish the ABGF. 
                                               
193 Ministry of Labour online information. Viewed  at: http:/proger.mte.gov .br/portalproger/pages/ 
programselinhasdecredito/fatexportar.xht. 
194 Information provided by the Brazilian authorities. 
195 SBCE's shareholders are  Banco do Brasil, BNDES, and the Comp agnie française d'assurance pour le 
commerce extérieur (COFACE). SBCE online inform ation. Viewed at: http://www.sbce.com.br/us/ 
aEmpresa.asp [August 2012]. 
196 Decree No. 7,333 of 19 October 2010. WT/TPR/S/283 • Brazil 
 
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  3.3.6  Export promotion and marketing assistance 
3.156.  The Brazilian Trade and Investment Promotion Agency (APEX-Brasil), created in 2003 as 
an autonomous social service supervised by the MDIC, is responsible for coordinating and implementing export promotion policies fo r Brazilian goods and services, for the 
internationalization of Brazilian companies, and for attracting foreign direct investment (FDI).
197 
The agency's top management body, the Deliberative Council, comprises of representatives from the public sector (MDIC, Ministry of External  Relations, CAMEX, and BNDES) and the private 
sector. APEX-Brasil is mandated to focus particularly on activities that may enhance exports of 
small and medium-size enterprises and create jobs, although it serves companies of all sizes. The 
agency's strategic objectives are to expand and diversify Brazilian exports, increasing their value added, foster the competitiveness of Brazilian companies by promoting their insertion in the 
international economy, and to attract FDI. In or der to achieve these goals, APEX-Brasil works to 
increase the participation of Brazilian companies in international value chains, adopts initiatives to foster innovation and design, and encourages business that use "sociobiodiverse" resources. It 
also works to improve the positioning of Brazilian products worldwide and to attract investment 
projects that transfer innovative technologies to Brazilian companies. It provides services such as 
market intelligence, business capacity building,  trade and image promotion, development of 
internationalization strategies, and other specific actions. Trade promotion activities include 
participation in trade missions, and international trade fairs, and visits of foreign buyers to Brazil.  
3.157.  APEX-Brasil works in partnership with private-sector associations representing 
81 manufacturing, commerce, and services sectors. Sectoral support projects are divided into 
six broad categories: food and beverages; fash ion; machinery and equipment; technology and 
health care; housing and civil construction; and entertainment services. Support for export promotion is given through the cofinancing of projects for up to 85% of the total value. As 
of September 2012, APEX-Brasil supported some 12,400 Brazilian co mpanies, which accounted for 
15% of total exports, and were destined to 132 markets.
198 During 2009-11, APEX-Brasil allocated 
R$909.64 billion to trade and investment promotion activities and R$129,831 million to operational 
expenses.199 
3.158.  Banco do Brasil operates the BrasilWebTrade site to promote Brazilian export companies in 
foreign markets and facilitate contacts with importers. BrasilWebTrade provides online support to exporters, ranging from the initial contact with potential buyers up to the shipment of goods 
abroad, including information dissemination, filling in trade documents, payment facilities for the 
importer, and foreign exchange contracts. Beneficiaries are Brazilian companies of all sizes, with export operations of up to US$50,000 per tran saction, and exporting under the modality of 
simplified foreign exchange.
200  
3.159.  The Ministry of Foreign Relations operates a trade promotion website called BrazilTradeNet 
(BTN), which provides a network of trade information aimed at stimulating exports and attracting 
foreign direct investment. It is used by the Ministry's Department of Trade Promotion and by 
Brazilian embassies in more than 50 countries. BTN's support focusses on MSMEs, foreign importers and investors, and Brazilian entrepreneurs seeking foreign financial agents.
201 
3.160.  The Exporters Showcase ( Vitrina do Exportador /VE) is a digital platform that utilizes 
SISCOMEX's data base to promote and disseminate information on Brazilian exports, which may be 
accessed by potential importers to search for Brazilian companies and products. The VE provides exporters with a virtual showcase service, allowi ng them to create their own web page, free of 
charge, to disseminate information on their firms and products.
202 
                                               
197 APEX was created by Decree No. 4,584 of 5 February 2003 and Law N° 10,668 of 14 May 2003. 
198 APEX online information.  Vi ewed at: http://www.apexbrasil.com .br/portal/publicacao/engine.wsp? 
tmp.area=594&tmp.texto=5157 [September 2012]. 
199 Information provided by APEX-Brasil. 
200 For more details see https://trade.bb.com.br. 
201 For more details see http://www.brazil tradenet.gov.br. 
202 For more information see www.vitrinedoexportador.gov.br. WT/TPR/S/283 • Brazil 
 
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  3.4  Measures Affecting Production and Trade 
3.4.1  Competition policy and price controls 3.4.1.1  Competition policy 3.161.  Brazil's competition regime was overhauled by Law No. 12,529 of 30 November 2011, 
which entered into force on 29 May 2012. The main changes comprise significant institutional 
restructuring, a switch from ex post  to ex ante  control of concentrations (mergers and 
acquisitions), and amendments regarding the scope of  prohibited conduct and sanctions, as well as 
staff and budget increases. 
3.162.  The new legislation redefined the structure and responsibilities of the government agencies 
in charge of administering the Brazilian Competition Policy System (BCPS). With a view to consolidating the investigation of anti-competitive conduct, merger control, and first-instance 
(administrative) adjudication into a single agency, the Administrative Council for Economic 
Defence (CADE) absorbed the Department of Econ omic Protection and Defence of the Secretariat 
of Economic Law (SDE); the SDE remained in charge of consumer protection. The Secretariat of 
Economic Monitoring (SEAE) became primarily responsible for competition advocacy, including 
issuing advisory opinions on competition-related matters (e.g., in regulation, trade, and industrial policies), and sector-wide studies.
203 Previously, the SDE and the SEAE were both entrusted with 
collection of evidence and the preliminary review of cases, whereas the CADE was responsible for 
delivering first-instance decisions.  
3.163.  Law No. 12,529 also stipulates a new internal structure for the CADE, comprising an 
Administrative Tribunal of Economic Defence (in charge of adjudication), a General 
Superintendence (entrusted with conducting investigations), and a Department of Economic 
Studies (to help ensure the technical and scientific rigour of CADE decisions).204 A specialized 
General Attorney’s Office is maintained at the CADE to, inter alia , represent it before Brazilian 
Courts and to enforce CADE decisions; in accordance with the new legislation, a member of the 
Federal Public Prosecutor’s Office will continue to give opinions on administrative sanctions decided by the CADE. In a bid to strengthen independence , the term of office of Administrative Tribunal 
members was amended from two years (renewable once) to four years (non-renewable). Long-
standing budget and human resource constraints are being addressed with provisions for the gradual filling of 200 additional staff posts at the CADE (primarily) and the SEAE.  
3.164.  The CADE may initiate investigations ex officio  or on the basis of complaints from any 
person. Independently of CADE administrative proceedings, which are not to be suspended by 
virtue of filing a lawsuit, injured parties may seek cessation of anti-competitive practices (and compensation for damages) in civil courts. According to the authorities, court judges may decide 
to await and take into consideration the outcome of CADE proceedings. Likewise, independent and 
parallel appeals to CADE decisions may be made before the CADE and a civil court; however, the judicial system has the final say. Due to the peculia rities of Brazil’s judici al system and the number 
of distinct instances for appeal, appeals of CADE decisions may take several years to reach final 
settlement in a court of law. Since 2007, court in junctions that suspend the enforcement of CADE 
decisions involving the imposition of a fine require the deposit of the same amount in an account under judicial administration. 
3.165.  Fines are the main sanctions imposable by the CADE and civil courts for infractions of 
competition law. The BCPS does not provide for advance rulings (negative clearance) on conduct and/or merger initiatives. Since 2009, the CADE ha s investigated cases relating to the markets for 
fuel, hospitals/medical care, airlines, pharmaceuticals, soft drinks, and staple foods. Merger 
reviews dominated CADE's enforcement activity during 2008-12, accounting for 86% of all cases; 
                                               
203 As part of its mandate, the SEAE also provides  advisory opinions to Brazil's Chamber of Foreign 
Trade (CAMEX) on anti-dumping measures, monitors markets and prices (including, since 2011, regulated prices), and undertakes ad hoc  studies upon request.  The SEAE's advisory opinions and recommendations are 
non-binding.   
204 Most advisory opinions prepared by the Departme nt of Economic Studies are enforcement-related, 
whereas the SEAE is responsible only for advocacy-related opinions. WT/TPR/S/283 • Brazil 
 
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  the anticipated switch from ex post  to ex ante  merger control triggered an intensification of 
merger deals during 2010-12 (Table 3.8).205 
Table 3.8 Competition enforcement, 2008-12 
 2008  2009  2010 2011 2012  
Total complaints/requests: 783  548 835 858 955  
Merger notification filings 638 474 660 716 825 
 Reviewed 609  457 615 695 704  
 Not reviewed  18 11 30 13 112 
 Desisted 11  6 15 8 9  
Leniency applications 2 4 8 1 10 
Examinations and inquiries concluded: 803  538 765 814 822  
Mergers 609 457 615 695 704 
 Approved without restrictions 550  437 588 649 565  
 Approved with restrictions 58 19 27 48 36 
 Disapproved 1  1 1 0 8  
Total administrative fines (R$ million) .. .. .. 31 45 
Number of civil court sentences .. .. .. .. ..  
Appeals (against 1st instance decisions) .. .. .. .. .. 
Decisions reversed/amended on appeal ..  .. .. .. ..  
.. Not available. 
Note: Due to the important structural changes to the Br azilian competition policy system during the review 
period, full statistics are not yet available. 
Source: Figures provided by the CADE. 
3.166.  In line with the effects principle common to  many jurisdictions, Brazil's competition regime 
does not apply to export-oriented anti-competitive practices (including cartels) that have no effect 
on the domestic market; also, it does not apply to  the provision of public aid or any preferential 
tax treatment by the federal and sub-federal gove rnments. While no economic activity (even if 
exercised under legal monopoly) is explicitly excluded from the scope of Brazil's competition law, 
the CADE and the specialized regulatory agencies  have complementary co mpetence in regulated 
sectors; the former has authority over competition-related matters, and the latter are competent to issue rulings on regulatory grounds. According to the authorities, the CADE regularly takes into 
account the technical opinions of sectoral regulators in its investigations. During the review period, 
BCPS administering agencies concluded technical cooperation agreements with the National 
Industrial Property Institute (INPI), the National Department of Mineral Production (DNPM), the National Justice Council (CNJ), the Foundation for Higher Education Professionals (CAPES), several 
state prosecutor’s officers, the MDIC, the Federal Police Department (DPF), the Brazilian Institute 
of International Trade, Consumer and Competition Studies (IBRAC), the National Regulatory Agency for Private Health Insurance and Plans (A NS), the National Agency for Civil Aviation 
(ANAC), the National Agency for Electrical Energy (ANEEL), and the Brazilian Health Surveillance 
Agency (ANVISA). The general aim of these agreemen ts is to improve the exchange of information 
and expertise in investigations of possible antitrust violations. 
3.167.  Brazil's competition legislation provides for a rule of reason approach (i.e., effects-based 
assessment) in the consideration of all concentrations and anti-competitive practices, including 
abuse of dominance.
206 The authorities affirm that, in its assessments, the CADE applies a 
consumer welfare standard, with top priority given to gains to consumers. In the new Law, the 
non-exhaustive list of potentially anti-competitive practices has been refined and expanded with a 
reference to the abusive use of intellectual property rights.207 In addition, compulsory licensing of 
intellectual property rights is explicitly mentioned among the possible remedies for conditional 
clearance of mergers and the possible penalties for anti-competitive conduct.208 The leniency 
                                               
205 CADE online information. Viewed at: http:// www.cade.gov.br/Default.aspx?9696969a61bf401a2a2a. 
206 A dominant position is defined as having either th e ability to unilaterally (including when acting as a 
group) alter market conditions or co ntrol over at least 20% of the releva nt market. The CADE may, however, 
apply different market control th resholds for specific sectors. 
207 Law No. 12,529 of 30 November 2011 (Article 36). 
208 Previously, Brazil's competition legislation stipulated only the possibility of compulsory licensing of 
patents (as opposed to intellectual pr operty rights) held by the infractor. WT/TPR/S/283 • Brazil 
 
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  programme has also been strengthened with the extension of its scope to violations of other 
statutes, such as fraud, bid-rigging, and conspiracy.  
3.168.  Brazil's switch from ex post  to ex ante  control of concentrations (mergers and acquisitions) 
introduced fines ranging from R$60,000 to R$60 million for completing a transaction prior to 
approval.209 The CADE must evaluate proposed transactions, weighing the potential harm to 
competition against possible gains passed on to consumers210, within 240 days from the 
notification's filing.211 The alternative market share (a bove 20%) and turnover (at least 
R$400 million by one of the merging parties in the previous year) notification criteria have been 
replaced by a cumulative criterion based on the Br azilian turnover of two of the merging parties in 
the previous year: only deals involving at least one entity meeting the R$750 million threshold and 
at least one other entity meeting the R$75 million threshold must be notified.212 This is expected 
to reduce the number of transactions subject to notification.  
3.169.  The fines for infractions committed by co mpanies have also been modified; formerly 
ranging from 1% to 30% of gross turnover in the la st fiscal year, they are currently set at 0.1% to 
20% of gross turnover in "the branch of activity " affected by the anti-competitive conduct in the 
fiscal year preceding the administrative investigation's commencement. This may result in a lower deterrent effect with respect to previous legislation, since prospective fines may be lower, and 
their application complicated by the need to dete rmine the branch of activity of an infraction. 
Modalities for the implementation of this new concept have yet to be adopted. According to the authorities, the reduced range for the fines was motivated by the inability of managers to pay in cases where both the company and its managers were fined for an infraction.  
3.170.  During the review period, Brazil continue d to strengthen and formalize its international 
cooperation efforts with a view to minimizing frictions arising from procedural or substantive differences between national competition regimes. The CADE has non-binding technical 
cooperation agreements with competition authorities from Chile, China, the European Union, 
France, MERCOSUR, Peru, Portugal, and Russia, as well as legally binding agreements with Argentina, Canada and the United States. In general, these cooperation instruments contain 
provisions on exchange of information, avoidance of conflicts, and confidentiality. Brazil is also an 
active participant in international fora on competition policy, including the International Competition Network and the BRICS International Competition Conference. 
3.4.1.2  Price controls 
3.171.  Up until 2012, the consumer price index (IPCA) used in Brazil’s inflation targeting regime 
contained 28 goods and services whose prices were deemed insensitive to supply and demand fluctuations because they were determined by a pre-established contract or set by a public sector 
entity (Table 3.9). Following an update of its me thodology, the Central Bank of Brazil excluded 
some items from that list as from January 2012 (e .g. lubricating oils and airline tickets); their 
prices are considered to be set freely by the respective markets. 
Table 3.9 Regulated prices, 2012  
  Competent entity 
Regulated at the federal level  
Petroleum products. Gasoline, diesel, bottled cooking gas  PETROBRAS 
Residential electricitya National Agency for Electrical Energy (ANEEL)  
Telephone services: fixed line (private and public), cellulara National Telecommunications Agency (ANATEL) 
Healthcare plans Federal Government  
Pharmaceutical productsa Federal Government  
                                               
209 A fee of R$45,000 is payable upon filing a notification of concentration. 
210 Prospective gains are defined, cumulatively or alternatively, as: increasing productivity or 
competitiveness; improving the quality of goods or serv ices; and/or fostering efficiency and technological or 
economic development. 
211 This period may be extended once, either for 60 days (upon the request of the merging parties) or 
for 90 days (justified decision of th e Administrative Tribunal). If the statutory time period has elapsed without 
a decision by the CADE, the transaction is considered automatically approved. 
212 The thresholds stipulated in Article 88 of La w 12,529/12 (R$400 and R$30 million, respectively) were 
raised by Inter-ministerial Ordinance 994/2012 of 30 Ma y 2012, on the basis of studies of the capitalization 
and dynamics of the Brazilian market. WT/TPR/S/283 • Brazil 
 
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    Competent entity 
Gambling (lottery tickets) Federal Government  
Subway  .. 
Interstate bus service  Federal Government  
Postal services (letters) Federal Government  
Ship fares (public transport) Federal Government  
Compressed natural ga s (vehicle fuel) Federal Government  
 Regulated at the sub-federal level 
Public transport: city bus fares,  intercity bus fares, city train 
fares, ferry-boat fares Municipalities  
Water & sewage fees Municipalities  
Taxi fares  State governments  
Vehicle registration fe es State governments  
Notary services State governments  
Piped cooking gas  Rio de Janeir o and São Paulo Municipalities  
Road tolls  State governments  
.. Not available. 
a Although the property owner is legally responsi ble for the payment of the IPTU, it is common 
practice for rental contracts to pass this obligation on to the tenants. 
Source: Central Bank of Brazil onli ne information. Viewed at: http: //www4.bcb.gov.br/pe c/gci/port/focus/ 
FAQ%205Preços%20 Administrados.pdf. 
3.172.  Although formally deregulated since 2002, consumer prices of refined petroleum products 
are de facto  fixed by the state-controlled PETROBRAS, which dominates Brazil's refining and 
wholesale distribution (Chapter 4.4). Residential electricity and fixed-line telephone tariffs are set 
through concession contracts awarded by the Federal Government. Since 2006, their annual 
readjustments are linked to general price indices. Prices for some 90% of pharmaceutical products 
are regulated; the Drug Market Regulation Chamber (CMED), an inter-ministerial body, sets 
maximum manufacturer and consumer prices, which are adjusted annually. The timing and size of 
readjustment of the remaining regulated prices is  at the discretion of the respective competent 
entities.  
3.173.  Certain agricultural products remain subject to minimum producer prices (Chapter 4.2); 
according to the authorities, these prices are used as a tool to support producers and not the corresponding market prices. 
3.4.2  Incentives 
3.4.2.1  General characteristics 3.174.  Incentives and government assistance are available in various configurations, with 
programmes administered at both the federal and sub-federal levels. Incentive programmes may 
be regional, aimed at developing research, or target ed at specific sectors. Most initiatives seek to 
promote entrepreneurship, technological and infrastructure upgrades, innovation, exports (section 3.3.4), energy efficiency, and regional development. Specific programmes are in place for 
the automotive, information technology, aeronautics, and petroleum industries (see also 
Chapter 4). The range of support measures includes: targeted loans
213; tax incentives; non-
repayable financial contributions; long-term and equity financing; accelerated depreciation; 
guarantees; grants; advisory services; and credit  insurance. Federal government expenditure on 
incentive and support programmes represented some 0.25% of GDP in 2012, up from 0.16% in 2009; these figures do not include estimates of forgone tax revenue.
214 The authorities affirm 
that all initiatives are assessed regularly to ensure that they effectively address market failures, 
which may constitute serious obstacles to the a ttainment of Brazil's development objectives. 
                                               
213 According to the authorities, most credit initiati ves address financing gaps where the private sector 
may not be able to fully respond to th e needs of Brazilian businesses; in gene ral, the cost of financing is lower 
than that required by pr ivate creditors in Brazil. 
214 National Treasury online information.  Viewed  at: https://www.tesouro.fazenda.gov.br/images/ 
arquivos/Responsabilidade_Fiscal/Politica_Fiscal/arquivos/Tabela3.xls. WT/TPR/S/283 • Brazil 
 
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  3.175.  Incentives granted in the context of certain programmes promoting information technology 
and telecommunications215 are linked to Basic Productive Process (PPB) criteria, which are product-
specific and stipulate which stages of the respective manufacturing process must be carried out in Brazil in order to recognize the industrialization of a product.
216 According to the authorities, 
compliance with PPB criteria ensures automatic (fast-track) approval of applications, but does not 
constitute a requirement for eligibility; this explanation is not clearly stated on official websites. By contrast, compliance with PPB criteria is an eligibility requirement for the incentives provided in the 
Manaus Free Trade Zone (ZFM) and for certain public procurement contracts in the technology and 
communication sector (section 3.4.4). 
3.176.  Basic Productive Process (PPB) criteria are established (and modified) by inter-ministerial 
decrees signed by the Ministers in charge of De velopment, Industry and Foreign Trade (MDIC) and 
of Science, Technology and Innovation (MCTI); proposals to that effect are elaborated, 
independently or upon request from interested  companies, by a technical group (GT-PPB) 
comprising representatives of the two ministri es and the Superintendence of the Manaus Free 
Trade Zone (SUFRAMA). The factors taken into consideration in the definition of PPB criteria 
include: investments to be made by the prospective manufacturer; technological development and local engineering skills employed; jobs created; th e product's export potential; investment in R&D; 
and the incentives' possible negative externalities within Brazil (e.g., relocation of production or 
altered investment decisions of competitors).
217 The time-frame for assessment of PPB requests is 
120 days. Incentives contingent on PPB criteria apply to some 235 companies established in the ZFM, and approximately 500 companies approved und er the capacity building and competitiveness 
enhancement in information technology programme; in May 2012, PPB criteria were in place for 
some 438 products.
218  
3.177.  The Brazilian Agency for Industrial Deve lopment has created an online database with 
information on federal and sub-federal support initiatives; the authorities could not confirm that all 
existing incentive schemes are included.219 According to the information available at the end of 
November 2012, private-sector companies could potentially benefit from some 184 assistance 
programmes, including incentives and exonerations (27), financial support (107), export 
support (35), technical assistance (4, export-oriented), and innovation support (9).220  
3.178.  Brazil's most recent notification to the WTO, under the Agreement on Subsidies and 
Countervailing Measures, contains 11 federal subsidy programmes that were operational in fiscal 
years 2009 and 2010 (Table 3.10). Following the noti fication, Brazil provided answers to requests 
for clarification by the European Union and Canada221; a similar request was made by Japan.222 
Table 3.10 Programmes notified to the WTO, 2009 and 2010  
Type Programmes Forms of support Amount 
disbursed 
(R$ million) 
Industrial Support for the development of the pharmaceutical 
productive chain (PROFARMA – Innovation); capacity building and competitiveness enhancement in information technology; industrial technology and agricultural/cattle 
breeding technology development programmes Long-term financing; 
equity participation; tax credits; accelerated depreciation 6,728.7 
                                               
215 PPB-linked programmes in clude: capacity building and compet itiveness enhancement in information 
technology (Law No. 8,248 of 23 October 1991); computers for educational use (REICOMP, Law No. 12,715 of 17 September 2012);  and national broadband programme (REPNBL-Redes, Law No. 12,715 of 
17 September 2012). 
216 The PPBs are set with a view to maximizing the util ization of productive capacity installed in Brazil; 
they do not involve any thresholds for do mestic value added, inputs or labour. 
217 Ministry of Development, Industry and Fo reign Trade online information. Viewed at: 
http://www.mdic.gov.br/sitio/interna/interna.php?area=2&menu=1103. 
218 Ministry of Development, Industry and Fo reign Trade online information. Viewed at: 
http://www.mdic.gov.br/arquivos/dwnl_1302542328.pdf and http://www.mdic.gov.br/arquivos/ dwnl_13395 11332.pdf. 
219 The authorities also noted that some definitions used by the Agency are targeted at entrepreneurs 
and may be misinterpreted in another context. 
220 Brazilian Agency for In dustrial Development, Guide to Industrial Development Support Instruments.  
Viewed at: http://guia.ab di.com.br/default.aspx. 
221 WTO documents G/SCM/Q2/BRA/35 and G/SCM/Q2/BRA/36 of 2 October 2012. 
222 WTO document G/SCM/Q2/BRA/37 of 24 October 2012. WT/TPR/S/283 • Brazil 
 
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  Type Programmes Forms of support Amount 
disbursed 
(R$ million) 
(PDTI/PDTA); productive development policy (PDP) 
Regional Amazon Development Authorit y and North-East Region 
Development Authority (SUDAM/SUDENE); investment funds 
for the Amazon, the north-east regions and the State of 
Espírito Santo (FINAM/FINOR/F UNRES); constitutional funds 
for financing the north-east, the north and the mid-west 
regions (FNE/FNO/FCO); development funds for the Amazon 
and the north-east regions (FDA/FDNE); regional 
development and promotion of R&D and technological 
innovation programme Tax exemptions and 
reductions; risk capital 
investments; loans 49,215.0 
Fisheries Programme for diesel oil support; programme for financing 
the enlargement and modernization of national fishing fleet (PROFROTA) Fuel price support 
(equalization); loan performance bonus 
(interest payment 
discount) 44.2 
Source: WTO document G/SCM/N/220/BRA, 10 January 2012. 
3.179.  The Brazilian development bank (BNDES) is  the main entity responsible for federal long-
term financing. It also plays a leading role in formulating and implementing government policies, such as the Plano Brasil Maior  and the Growth Acceleration Programme (PAC).
223  
3.180.  The Federal Government's recently adopted policy Plano Brasil Maior  comprises a raft of 
stimulus measures, such as broadening fiscal, investment, and innovation incentives, aimed at fostering technological innovation as well as attenuating the impact of the global economic 
downturn.
224 The measures implemented to date include: tax exemptions for manufacturers of 
laptop computers; substitution of employers' so cial security contributions by a (lower) tax on 
revenue from domestic sales for 40 subsectors (covering about 3,300 tariff lines)225; and 
amplification of eligible sectors and favourable financing terms under federal programmes.226 
Besides increased BNDES resources and improved access to finance, the Plano Brasil Maior  
supplies additional public funds (up to R$25 billion) for the provision of guarantees through the newly-created Brazilian Funds and Guarantees Management Agency (ABGF).
227 The ABGF will 
intervene to cover risks related to infrastructure, shipbuilding, and civil aviation projects, as well 
as public-private partnerships and the hosting of  m a j o r  s p o r t i n g  e v e n t s ;  i t  w i l l  a l s o  p r o v i d e  
guarantees for foreign trade transactions, social housing, education loans, and rural insurance.  
3.181.  Most state and municipal governments offer additional tax incentives to businesses in the 
form of rebates, holidays, credits, or exemptio ns. In June 2011, Brazil's Federal Supreme Court 
(STF) declared unconstitutional 23 state-le vel programmes granting ICMS rebates; 
some 50 similar measures were being challenged at the STF in March 2012. According to the STF, 
such incentives may only be granted through legal instruments signed by the National Fiscal Policy 
Council (CONFAZ), which regroups the treasury secretaries of all states and that of the Federal District. Against the backdrop of on-going discussions aimed at ending fiscal competition among 
federative states, it has actually intensified. In some cases, ICMS exemptions granted on imported 
goods are accompanied by ICMS rebates upon these goods' resale in another State, resulting in tax credits for the importer. To correct this situation, the Brazilian Senate established a single 
ICMS rate of 4% on inter-state sales of imported  goods, thus capping the tax credit that may be 
claimed for such transactions; the single rate must be phased in by 2025.
228 
                                               
223 The Banco da Amazônia (BASA) and the Ba nco do Nordeste do Brasil (BNB) manage, inter alia , 
federally-funded regional programmes. 
224 Decree No. 7,540 of 2 August 2011. 
225 For these subsectors, the new tax on revenue from domestic sales ranges between 1% and 2% 
(against 15% to 22.5% on payroll); th e COFINS rate levied on imports of equivalent products is increased by 
the same rate (Law No. 12,546 of 14 December 2011 and Law No. 12,715 of 17 September 2012). 
226 Plano Brasil Maior  online information. Viewed at: http://www.brasilmaior.mdic.gov.br/images/data/ 
201208/ad9d7ee47c236ba9ee8fda7bb27501d7.pdf. 
227 Provisional Measure No. 564 of 3 April 2012, converted into Law No. 12,712 of 30 August 2012. 
228 Resolution No. 13/2012 of 26 April 2012. WT/TPR/S/283 • Brazil 
 
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  3.4.2.2  Industrial incentives 
3.182.  Brazil has notified to the WTO four industrial incentives programmes: the Support 
Programme for the Development of the Pharmaceutical Productive Chain (Profarma – Innovation); Capacity Building and Competitiveness Enhancement in Information Technology (CBIT); the
 
Industrial Technology and Agricultural/Cattle Breeding Technology Development Programme (PDTI 
& PDTA); and the Productive Development Policy (PDP). 
3.183.  The PROFARMA – Innovation  aims at supporting projects to help consolidation of Brazil's 
pharmaceutical industry. It supports pharmaceutical industry R&D efforts in Brazil, aimed at 
developing new or significantly improved products and/or processes. Beneficiaries must be enterprises incorporated under Brazilian Law. The BNDES is responsible for administration of the programme, which was established by BNDES Reso lution No. 1,501/07 of 18 September 2007. The 
programme provides long-term financing and/or equity participation in the company (through 
subscription of securities) or participation in the project's revenues. Minimum financial support is R$1 million. Loans are granted at a fixed interest rate of 4.5% per year with maturity up to 
15 years. The programme was scheduled to be terminated in August 2012, but was extended 
to March 2013. Disbursements under the PROFARMA programme totalled R$49.3 million (US$25 million) during 2007-10 (Table 3.11). 
Table 3.11 Tax exemption/reductions under industrial incentives programmes, 2007-11 
(R$ million)  
Year/ 
Programme PROFARMA CBIT PDTI & PDTA PDP Total 
2007 4.0 2,755.4 2.4 0.0 2,771.9 
2008 13.6 3,065.2 1.3 155.0 3,247.7 
2009 12.7 3,027.0 0.2 97.0 3,138.1 
2010 19.0 3,464.1 0.0 106.0 3,567.5 
2011 .. 3,758.7 0.0 .. 3.758,7 
2007-11 49.3 16,070.4 3.9 358.0 16,483.9 
.. Not available. 
Source: WTO documents G/SCM/N/186/BRA, 1 September 2010, and G/SCM/N/220/BRA, 10 January 2012. 
SEGIN/ASCAV/SEXEC/MCTI. 
3.184.  The CBIT programme has the purpose of  encouraging manufacturers of information 
technology goods to invest in R&D activiti es, create new products, and improve Brazil's 
competitiveness in the area. The programme is governed by Law No. 8,248/91, as amended by 
Law No. 10,176/01 and Law No. 11,077/04, and is managed by the Ministry of Finance, the Ministry of Development, Industry and Foreign Trad e, and the Ministry of Science and Technology.  
Benefits from the CBIT programme consist in an exemption or reduction of the indirect Tax on 
Industrial Products (IPI) for information technology  goods, as well as reduction of the IPI on raw 
materials, intermediate goods, and material from used packages. This exemption or reduction is used as a tax credit. To qualify for the 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 R&D activities. Benefits have been granted since 1993 and the expected termination da te is 2019. The beneficiaries are industrial 
enterprises, as well as research institutes, and centers, and laboratories, through financial support 
from industrial enterprises that choose to outsource the execution of research projects.
229 
Disbursements under the CBIT programme totalled R$16.07 billion (US$8.0 billion) in 2007-11 
(Table 3.11). 
3.185.  The PDTI & PDTA fostered technological im provement for industrial and agricultural/cattle 
breeding enterprises, through R&D initiatives. The programme sought to promote partnerships 
between research centers and universities, inst itutes, and enterprises. The PDTI & PDTA was 
established by Law No. 8,661 of 2 June 1993, and regulated by Decree No. 949 of 5 October 1993. 
The Ministry of Science and Technology was responsible for its administration. Benefits consisted of income-tax deductions due on the sum of the expenses in R&D activities and of IPI due on 
equipment, machinery, and devices directly allo cated to research and technological development 
                                               
229 WTO documents G/SCM/N/186/BRA, 1 September 2010, and G/SCM/N/220/BRA, 10 January 2012. WT/TPR/S/283 • Brazil 
 
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  and on instruments, parts, and tools associated with these goods. The amount of the subsidy was 
proportional to the value of the R&D expenses. The programme was officially terminated in 2006 and no new deductions have been granted since then, but firms with ongoing projects were authorized to continue benefiting from PDTI/PDT A until their completion. The last benefits were 
disbursed in 2009. Disbursements under the PDTI & PDTA programme in the period 2007-11 
totalled R$3.9 million (US$2 million) (Table 3.11). 
3.186.  The PDP was established by Law No. 11,774/2008 to increase production capacity in the 
manufacturing sector. Incentives under the PDP consist of: (i) 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 Spec ial Register (REB); (ii) income tax postponement, 
as a result of accelerated depreciation of capital goods used in the manufacturing of vehicles and 
their parts; as well as of equipment, machinery and devices used in the manufacturing of capital 
goods. The Ministry of Finance is responsible for inspecting the programme's tax incentives and 
the Ministry of Defence is responsible for maintaining the REB. Reduction of indirect taxes PIS and 
COFINS is granted to shipyards that build, cons erve, modernize, convert or repair of vessels 
registered in the REB. The programme has no pre-established termination date. 
3.4.2.3  Regional programmes 
3.187.  At the federal level, Brazil administers a number of regional programmes, consisting 
mainly of tax benefits for investment in less developed regions, such as the north and north-east. Benefits apply equally to foreign and domestic investors. There are also programmes at the state 
level, of a general nature or targeting certain industries, which grant ICMS reductions or 
exemption. 
3.4.2.3.1  SUDAM and SUDENE programmes 
3.188.   The SUDAM and SUDENE programmes grant tax incentives to firms and evaluate and 
approve projects of interest to the developmen t of the legal Amazon and north-east regions.
230 
The programmes have been notified to the WTO as granting subsidies.231 Their aim is to reduce 
economic and social imbalances between the Brazilian regions by means of compensatory 
mechanisms for the development of these regions. Beneficiaries are industrial and agricultural enterprises with undertakings in the Amazon or north-east.  
3.189.  The programmes and their benefits are regulated by Law No. 9,532/97 and Provisional 
Measure No. 2,199/01, and Supplementary Law Nos. 124 and 125 of 3 January 2007. The tax 
reduction benefits granted under these programmes include: (i) a 75% reduction of income tax for industrial or agricultural firms classified as being of interest to regional development, for ten years 
starting from the year after the enterprise started to operate; (ii) after the ten-year period, income 
tax reduction for enterprises meeting the conditions of interest to regional development (12.5% from 2009 to 31 December  2013); and (iii) reinvestment of  income tax for activities of 
interest for regional development, requiring firms to deposit 30% of the income tax due, plus 50% 
of their own resources, on an annual basis, ending on 31 December 2013, in the Banco da 
Amazônia or in the Banco do Nordeste do Brasil (BNB), to be used in the legal Amazon or north-east regions in activities linked to capacity modernization or expansion.
232 Companies are allowed 
to submit projects until 31 December 2013. The income tax reduction benefit is terminated after 
ten years from the date the industry starts operations. 
3.190.  Accumulated tax exemptions/reductions for both SUDAM and SUDENE programmes 
for 2007-11 were R$22.97 billion (some US$11.5 billion), up from R$7.06 billion (US$4.25 billion), 
                                               
230 The legal Amazon region compri ses the states of Amazonas, Roraima, Amapá, Pará, Tocantins, 
Rondania, Mato Grosso, and part of Maranhão. The north-east area incl udes Maranhão, Piauí, Ceará, Rio 
Grande do Norte, Paraíba, Pernambuco, Alagoas, Sergipe,  and Bahia, and an area of Minas Gerais included in 
the so-called "drought polygon" (" polígono das secas "). 
231 WTO document G/SCM/N/220/BRA, 10 January 2012. 
232 Ministry of National Integration online info rmation. Viewed at: http://www.mi.gov.br/fundos/ 
incentivos_fiscais/index.asp. WT/TPR/S/283 • Brazil 
 
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  during 2002-06 (Table 3.12). The authorities note th at statistical data for the assessment of the 
trade effects of the subsidy are not available.233  
Table 3.12 Tax exemptions/reductions und er the SUDAM and SUDENE programmes, 
2007-11 
(R$ million)  
Year SUDAM/ADA SUDENE/ADENE Total 
2007 2,112.5 2,052.2 4,164.7 
2008 2,350.1 2,282.9 4,633.0 
2009 1,508.9 2,849.8 4,358.7 
2010 1,703.9 3,217.9 4,921.8 
2011 1,559.1 3,334.5 4,893.6 
2007-11 9,234.5 13,737.3 22,971.8 
Source: WTO documents G/SCM/N/186/BRA, 1 September 2010, and G/SCM/N/220/BRA, 10 January 2012; 
and information provided by the Brazilian authorities. 
3.4.2.3.2  Development Funds for the Amazon and the North-East Regions (FDA/FDNE) 
3.191.  The Amazon Development Fund ( Fundo de Desenvolvimento da Amazônia  (FDA) and 
North-East Region Development Fund ( Fundo de Desenvolvimento do Nordeste ) (FDNE) are under 
the authority of the Ministry of National Inte gration, SUDAM, SUDENE, and the Deliberative 
Council of the Development Authorities of the No rth and North-East Regions. They are governed 
by Provisional Measures No. 2156-5 and No. 157-5,  as amended by Supplementary Laws No. 124 
and No. 125 of 3 January 2007. Banco da Amazônia and BNB operate the Funds. 
3.192.  The beneficiaries of loans backed by development fund resources are enterprises that 
carry out productive activities in the sectors of crop/livestock, mineral, industrial and agri-industrial, tourism, and infra-structure in the Amazon and north-east regions. Law No. 12.712/12 
of 31 August 2012 allowed the operators to take  u p  t o  1 0 0 %  o f  t h e  c r e d i t  r i s k .  S U D A M  a n d  
SUDENE must approve the projects. The maturity of the loans is up to 12 years, including the 
grace period, and may be extended up to 20 years for infrastructure projects. Since December 2012, CMN Resolution No. 4,171/12 regulates the operations of the development funds, 
and allows the operators an annual charge of 2.5% for risk. The FDA and FDNE charge 4% yearly. 
The difference between the interest rate of the operation (from 5% to 6.5% per year) and the amount paid to funds and banks (6.5%) is equalized by the National Treasury.
234 Loans backed by 
development fund resources have been granted since 2006 with a deadline of 31 December 2013. 
Accumulated tax exemptions/reductions for the FDA and FDNE programmes for 2007-11 were R$6.35 billion (Table 3.13), or some US$3.18 billion. 
Table 3.13 Tax exemptions/reductions under  the FDA and FDNE programmes, 2007-11 
(R$ million)  
Year FDA FDNE Total 
2007 0.0 48.0 48.0 
2008 0.0 528.6 528.6 
2009 334.5 2,672.4 3,006.9 
2010 1,809.3 53.5 1,862.8 
2011 404.7 494.0 898.7 
2007-11 2,548.5 3,796.5 6,345.0 
Source:  WTO documents G/SCM/N/186/BRA, 1 September 2010, and G/SCM/N/220/BRA, 10 January 2012, 
and information provided by the Brazilian authorities. 
3.4.2.3.3  FINAM/FINOR/FUNRES 
3.193.  The Amazon Investment Fund (FINAM), North-East Investment Fund (FINOR), and Fund 
for the Economic Recovery of the State of the Espírito Santo (FUNRES) programme, regulated by 
                                               
233 WTO documents G/SCM/N/186/BRA, 1 September 2010, and G/SCM/N/220/BRA, 10 January 2012. 
234 Information provided by the Brazilian authorities; and Ministry of National Integration online 
information. Viewed at: http://www.mi.gov.br/fundos/fundos _de_desenvolvimento_regional/index.asp. WT/TPR/S/283 • Brazil 
 
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  Law No. 8,167 of 16 January 1991, Law No. 9,532 of 10 December 1997, and Law No. 9,808 
of 20 July 1999, aims to reduce economic and social imbalances between regions by means of compensatory mechanisms for the development of the Amazon and North-East regions and for the State of Espírito Santo. FINAM/FINOR are the respon sibility of the Department of Investment Fund 
Management, under the Ministry of National Integration, in accordance with Decree No. 5.847, 
of 14 July 2006.
235 Banco da Amazônia and BNB are respectively the financial agents of the 
FINAM/FINOR. FUNRES is administered by Grupo de  Recuperação Econômica do Estado do Espírito 
Santo (GERES), and Banco de Desenvolvimento do Espírito Santo S.A. is the financial agent. 
3.194.  The beneficiaries of FINAM/FINOR/FUNRES are legal persons implementing a project that 
can generate jobs and income and promote regional or local development. The programme provides financial support in the form of risk capital investment operated by BASA, BNB, or Banco 
de Desenvolvimento do Espírito Santo with funding drawn from the FINAM, the FINOR, and the 
FUNRES, respectively. The investments made are matched with primary debenture issues convertible into stock, which occurs only after the project is implemented; the shares are non-
voting. The FINAM/FINOR/FUNRES programme also allows income tax incentives, through a 
deduction of currently 9% until end December 2013. Tax incentives are channelled through the respective fund for investment in projects by be neficiary companies. Benefits have been granted 
since 1975; their expiry is scheduled for 31 December 2013. Benefits totalled R$474.67 million 
(US$233 million) in 2007-11 (Table 3.14), do wn from R$532.6 million (US$321 million) 
in 2002-06. 
Table 3.14 FINOR/FINAM/FUNRES, FISCAL BENEFITS, 2007-11 
(R$ million) 
Years 2007 2008 2009 2010 2011 2007-11 
FINAM 9.77 0.0 5.2 0.0 20.1 35.07 
FINOR 0.32 1.08 49.7 164.8 200.5 416.4 
FUNRES 0.0 0.0 5.9 4.8 12.5 23.2 
Total 10.09 1.08 60.8 169.6 233.1 474.67 
Source:  WTO documents G/SCM/N/186/BRA, 1 September 2010, and G/SCM/N/220/BRA, 10 January 2012, 
and information provided by the Brazilian authorities. 
3.4.2.3.4  Constitutional fund s for financing the north-east, the north and the mid-west 
regions (FNE/FNO/FCO) 
3.195.  The constitutional funds finance activities in productive sectors in the north, north-east 
and mid-west regions (FNE/FNO/FCO), with the aim of contributing to the social and economic 
development of these regions. They were cr eated by Law No. 7,827 of 27 September 1989, as 
amended by Law No. 10,177 of 12 January 2001 and Decree No. 6,367 of 30 January 2008. The 
administration of each fund is autonomous and held by a Deliberative Council in each region; these councils approve the financing programmes of each fund and evaluate the results obtained. 
The Ministry of National Integration defines the guidelines and priorities for investments, and for 
monitoring and evaluating the financing programmes. The financial agents of the funds are Banco da Amazônia, BNB, and Banco do Brasil S.A. The constitutional funds have no pre-established time 
limit. They comprise some of the financial instruments included in Decree No. 6,047, 
of 22 February 2007, which institutes a National Policy of Regional Development (PNDR). 
3.196.  The beneficiaries of loans backed by cons titutional fund resources are producers (natural 
or legal persons, as well as production cooperatives) that carry out productive activities in the 
crop/livestock, mineral, industrial and agri-ind ustrial, tourism, infra-structure, commerce and 
service sectors of the north, north-east and mid-west regions. The FCO, FNE and FNO, are 
financed with 3% of IPI and income tax revenue (IR), of which 0.6% for the FCO, 1.8% for the 
FNE, and 0.6% for the FNO. Credit operations base d on constitutional financing funds are subject 
to the charges defined in Law No. 10,177 of 2001 and following legislation. Decree No. 6,367, of 30 January 2008 fixes annual interest rates between 5% and 8.5% for rural operations and 
between 6.75% and 10% for other agri-industry, in dustrial operations, infrastructure, tourism, 
                                               
235 WTO document G/SCM/N/155/BRA, 11 October 2007. WT/TPR/S/283 • Brazil 
 
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  commerce, and services.236 These rates may be reduced by 15% or 25% if the beneficiary 
operates in the north-east semi-arid area and payments are made before the due date.237 
Resolutions CMN 4,075/12 and 4,078/12, lowered the rates to 3.5% for farmers affected by the drought in the north-east and to 1% for farmers affected by the rains in the north. These rates 
were in place for operations contracted until the end of February 2013.  
3.197.  Between 2007 and 2011, the constituti onal funds granted loans for R$71.36 billion 
(US$35.8 billion), of which 60% under the FNE (Table 3.15). The programme loans for 2011 
totalled R$18.51 billion (US$9.7 billion). In 2011, th e constitutional funds channelled R$7.2 billion 
to agriculture.
238 Disbursements over 2007-11 exceed the accumulated loans granted between the 
beginning of the programme in 1989 and 2006. Th e accumulated loans granted between 1989 and 
end 2011, totalled R$120.9 billion; 90% of beneficiaries were micro and mini producers. 
Table 3.15 Constitutional fund loans, 2007-11  
(R$ million) 
Years 2007 2008 2009 2010 2011 2007-11 
FCO  1,973.8 3,470.1 3,183.4 4,253.7 5,546.6 18,427.6 
FNE 4,246.5 7,668.6 9,134.1 10,755.1 11,090.7 42,895.0 
FNO 1,109.9 2,053.6 2,440.4 2,568.6 1,869.2 10,041.7 
Total 7,330.2 13,192.3 14,757.9 17,577.4 18,506.5 71,364.3 
Source: Ministry of National Integration. Viewed at: http://www.mi.gov.br/fundosundos_constitucionais/ 
index.asp?area=FCOProgramação2011;http://www.mi.g ov.br/fundos/fundos_co nstitucionais/index.a
sp?area=FNO-Programação2011; and http://www.mi.gov.br/fundos/fundos_constitucionais/index. asp?area=FNE-Programação2011. WTO documents G/SCM/N/186/BRA, 1 September 2010, and G/SCM/N/220/BRA, 10 January 2012. 
3.4.2.3.5  Regional Development and Promot ion of R&D and Technological Innovation 
Programme 
3.198.  The Regional Development and Promotion of Research and Development and Technological 
Innovation Programme is aimed at promoting investment in R&D and technological innovation in 
the north, north-east and mid-west regions (except the Federal District). The programme is regulated by Law No. 9,826/1999 of 23 Augu st 1999, amended by Law No. 12,218/2010 of 
30 March 2010.
239 The Ministry of Development, Industry  and Foreign Trade and the Ministry of 
Finance are responsible for determining the requ irements for the submission of a project's 
application and approval. The Ministry of Developm ent, Industry and Foreign Trade is responsible 
for evaluating and monitoring the programme. The Ministry of Science and Technology is 
responsible for verifying the proof of investment in R&D and technological innovation in the 
regions covered by the programme. 
3.199.  The programme offers benefits in the form of tax reductions, i.e. a 32% reduction of the 
IPI levied on sales of products classified in codes 8702 and 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. Beneficiaries are industrial enterprises installed in the areas covered by SUDAM, 
SUDENE, and in the mid-west region. Beneficiaries must invest at least 10% of the value 
corresponding to the IPI reduction in R&D and technological innovation in the regions covered by the programme. Incentives totalled R $1,165.4 million in 2009 (US$580 million) 
and R$1,333.7 million (US$670 million) in 2010. In accordance with Law No. 12,218/2010, the 
programme is scheduled to expire in December 2015. 
                                               
236 Ministry of Integration online information. Viewed at: http://www.mi.gov.br/fundos/fundos_ 
constitucionais/index.asp . 
237 Ministry of Integration online information. Viewed at: http://www.mi.gov.br/fundos/fundos_ 
constitucionais/encargos/outras_operacoes.asp. 
238 Central Bank online information. View ed at: http://www.bcb.gov.br/?RELRURAL. 
239 The text of the law may be viewed at: http: //www6.senado.gov.br/legisla cao/ListaTextoIntegral. 
action?id=240103&norma=261030. WT/TPR/S/283 • Brazil 
 
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  3.4.2.3.6  Other regional programmes 
3.200.  Under Law No. 9,440 of 14 March 1997 fiscal incentives were granted to enterprises in the 
automotive industry located in the north, north-ea st and mid-west regions. The original incentives 
included: 50% import duty reduction on capital goods and parts; and up to 50% reduction of 
import duties and up to 25% reduction of the IPI for inputs and parts and components. 
Since 2002, benefits have been limited to credits on IPI payments. Under Law No. 9,440/97, benefits would terminate on 31 December 2010. Howe ver, they were extended, albeit modified, by 
Law No. 12,218/2010, which eliminated the import duty and IPI reductions and introduced a 
system of tax credits up to 31 December 2015, in accordance with the practice since 2002.
240 The 
benefit is conditional upon the realization of investments in R&D and technological innovation in the region, including in automotive engineering, co rresponding to at least 10% of the value of the 
tax credit determined.  
3.4.2.4  Free-trade zones 
3.201.  Brazilian legislation defines free-trade zones (FTZ), for imports and exports, as zones 
created to promote the development and regional in tegration of border areas in the north region, 
for which they are granted fiscal incentives. The basic legislation is contained in Decree Law No. 288 of 28 February 1967, Decree Law No. 356 of 15 August 1968, Decree Law No. 1,435 
of 16 December 1975, and Law No. 8,387 of 30 December 1991, as amended. 
3.202.  Eight free-trade zones have been created (Manaus and Tabatinga, in Amazonas; 
Macapa/Santana in Amapá, Brasiléia and Cruzeiro do Sul, in Acre; Boa Vista and Bonfim, in Roraima; and Guajará-Mirim, in Rondônia).
241 However, as at end 2012, only four were in 
operation, of which the Manaus Free Trade Zone (ZFM) was the only one engaged in production 
operations; the other three zones were engaged only in commerce operations. The Tabatinga FTZ, in Amazonas, was created by Law No. 7,965 of 22 December 1989, and started operating in 
mid-1990; its main activity is the importation of foreign and national goods to be used in the area. 
The Macapá/Santana FTZ was created by Law No. 8,387 of 30 December 1991, and regulated by 
Decree No. 517, of 8 May 1992; it started functioning in 1993 and its main activities are 
export/import operations. The Guajará-Mirim FTZ located in Rondônia, next to the border with 
Bolivia, was created by Law No. 8,210 of 19  July 1991 and regulated by Decree No. 843 
of 23 June 1993; it started operations in May 1994. The Brasiléia FTZs in Acre, was created by Law No. 8,857 of 8 March 1994 and regulated by Decree No. 1,357 of 30 June 1994. The Boa 
Vista FTZ located in Roraima was created by Law No. 11,732 of 30 June 2008 and regulated by 
Decree No. 6,614 of 23 October 2008. The FTZs of Bonfim in Roraima, and Cruzeiro do Sul in 
Acre, although created, have not started operations yet. 
3.203.  The main FTZ is the ZFM, established in 1967 with the goal of creating a development pole 
in the Amazon region through the formation of an industrial park, which would turn Manaus into an industrial, commercial, and agriculture centre with economic conditions to promote the 
development of the region. The ZFM's administrator is the Superintendence for the Manaus Free 
Trade Zone (SUFRAMA), an autonomous agency created in 1967 and linked to the MDIC. SUFRAMA also manages Brazil's seven other free-trade zones.
242 Companies established in the 
ZFM are granted tax exemptions by both the fe deral and state governments. One of the main 
requirements for the concession of these benefits  is observing the Basic Productive Process (PPB) 
criteria, for which firms need to undertake agreed local manufacturing steps for specific products, and provide a detailed description of the vari ous stages of assembly, preparation, and 
transformation of inputs used in the production of manufactured products.
243 A number of 
environmental and social requirements must also be met for a project to be eligible. All imports to the ZFM require a licence, authorized both by the SECEX and by SUFRAMA. Incentives under the 
                                               
240 The IPI credit varies in each year during 2011-15 and is equivalent to twice the tax due net of 
domestic market sales in 2011: 1.9 times its value in 2012, 1.8 in 2013, 1.7 in 2014, and 1.5 in 2015. 
241 SUFRAMA online information. Viewed at: http://w ww.suframa.gov.br/suframa _descentralizadas_alcs. 
cfm. 
242 SUFRAMA online information. Viewed  at: http://www.suframa.gov.br/. 
243 The following products are excluded from tax incent ives in the ZPM, in a ccordance with Decree Law 
No. 288/67: (a) weapons and munitions; (b) tobacco and derived products; (c) alcoholic beverages; 
(d) passengers automobiles; and (e) perfume or beauty products (except positions 3303 to 3307 of the 
MERCOSUR CET) destined to internal consumption in the ZFM or when made with raw materials of regional 
fauna or flora. WT/TPR/S/283 • Brazil 
 
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  ZFM programme will be in force until 2023, in accordance with Constitutional Amendment No. 42 
of 19 December 2003. 
3.204.  Federal tax incentives include: (i) import-duty exemption for goods to be used or 
consumed in the ZFM, including capital goods and raw materials, as well as for goods listed in 
Inter-Ministerial Ordinance No. 300 of 20 December 1996244, destined for consumption in the 
western Amazon region; (ii) up to 88% reduction of import duties applied on raw materials, intermediate inputs, and secondary and packaging ma terials used in the production of industrial 
goods in the ZFM to be sold in the rest of Brazil; (iii) reduction of import duties on material used in 
the fabrication of informatics goods and motor vehicles, with the percentage of reduction depending on the share of domestic inputs and labour in total production (the coefficient of reduction is increased by 5% for motor vehicles); (iv) IPI exemption for goods produced in the 
ZFM, for imports used or consumed in the zone, and for goods listed in Inter-Ministerial Ordinance 
No. 300/96 destined for consumption in the western Amazon region; (v) IPI exemption for domestic goods entered into the ZFM or other areas of the western Amazon region, for goods 
produced with regional agricultural raw materials, in all areas of the western Amazon region; 
(vi) IPI credits, when applicable; (vii) export-tax exemption for goods produced in the ZFM, when applicable; (viii) exemption from PIS/PASEP and COFINS contributions for operations in the ZFM; 
and (ix) 75% reduction of income tax until 2013.  
3.205.  The fiscal incentives granted by the Stat e of Amazonas, regulated by Law No. 2,826/2003, 
as modified by Law Nos. 2,879/2004, 2,927/04, and 3,022/05 are: (i) exemption from the ICMS on machinery and equipment purchases to be used for production in the ZFM; (ii) ICMS credit on 
industrial and agri-industry product purchases ranging from 60% to 100%, depending on the 
products; (iii) reduction of the tax base for the ca lculation of the ICMS of 55% (for goods to be 
used in the production of integrated circuits) or 64.5% (for goods to be used in the production of 
capital goods).
245 There is also the possibility of deferring the ICMS for imports of raw materials, 
and of reducing the ICMS rate to 4%. On averag e, some 80% of the ICMS is returned. Municipal 
government incentives are also granted an exemption for ten years of the Tax on Urban Real 
States Property (IPTU), the public cleaning and conservation tax, and of business taxes. 
3.206.  ZFM beneficiaries may also take advantage of the Western Amazon Export Special 
Programme (PEXPAM), which allows the importation of raw material, inputs and industrial components exclusively for export  and grants exemption of import  duties, the IPI, the ICMS, and 
of any other tax or financial retribution to any public body. Companies are not required to fulfil the 
PPB criteria to benefit from the PEXPAM progra mme. ZFM enterprises may also benefit from the 
SUFRAMA programme until 2013.
246 
3.207.  There are no restrictions on movements from the ZFM to the rest of Brazil: importers may 
supply foreign goods from their stock in the ZFM to other parts of the country, without quantitative limits. Goods imported into Brazil from the ZFM are subject to all import duties and 
taxes normally assessed, in accordance with Decree Law No. 1,455 of 1976, with the exception of 
duties on inputs, which are reduced by up to 88%.
247 The reduction does not apply to informatics 
products or to vehicles, for which the full duty is applied. Products manufactured in the ZFM solely with imported inputs, goods sold to FTZs, and obsolete machinery and equipment are not subject 
to the payment of duties.  
3.208.  The main activities in the ZFM are: electronics, information technology and 
telecommunication goods (including mobile phones), vehicles, chemicals, thermoplastics, lighters, 
pens, disposable shavers, mechanical machinery, metallurgical products, and watches. Most 
production is industrial and destined for the do mestic market: in 2012, 97.7% of production was 
sold in the Brazilian market. Production for the domestic market almost doubled between 2007 
and 2011, to US$40.4 billion; production for export remained in the US$800 million to 
US$1.2 billion range (Table 3.16). Investment in the ZFM during the period totalled 
                                               
244 SUFRAMA online information. Viewed at: http://www.suframa.gov.br/download/legislacao/ppb/1996/ 
pi-300-96.pdf. 
245 SUFRAMA online information. Viewed at: http: //www. suframa.gov.br/zfm_incentivos_estado.cfm. 
246 SUFRAMA online information. Viewed at: http://w ww.suframa.gov.br/eng/modelozfm_incentivos_tax 
_EN.cfm. 
247 The methodology to assess final duty is described in Decree No. 4,543 of 26 December 2002. WT/TPR/S/283 • Brazil 
 
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  US$52.5 billion. As at late September 2012, the ZFM employed 110,982 persons; it had income 
totalling US$32.8 billion in 2011.248 
Table 3.16 Manaus free-trade zone production, 2007-12  
(US$ million) 
 Year Domestic market Foreign market Final 
balance Exports Imports Balance Exports Imports Balance 
2007 24,623.5 6,598.4 18,025.1  1,044.8 6,299.1  -5,254.5 12,770.8  
2008 28,907.2 7,918.1 20,989.1  1,192.0 8,555.3  -7,363.3 13,625.7  
2009 25,099.6 5,481.1 19,618.5  857.4 6,344.6  -5,487.2 14,131.3  
2010 34,180.8 7,222.7 26,958.1  1,037.5 10,181.3  -9,143.8 17,814.3  
2011 40,411.4 9,048.6 31,362.8  838.7 11,246.4  -10,407.7 20,955.0  
2012 (Sept.) 27,133.4 5,621.2 21,512.2  619.5 8,370.5  -7,751.0 13,761.1  
Source: SUFRAMA (2012), Indicadores de Desempenho do Polo Industrial de Manaus 2007-2012 . Viewed at: 
http://www.suframa.gov.br/download/indicadores/RelatorioIndicadores Desempenho_9_2012-05_ 11_ 2012-08_34_23.pdf. 
3.4.2.5  R&D and other programmes 
3.209.  The administration of R&D programmes is the responsibility of the Ministry of Science, 
Technology and Innovation (MCTI). Brazil's po licy of fiscal incentives for promoting R&D 
programmes in Brazilian enterprises is contained mainly in Law No. 8,661 of 2 June 1993 and 
Decree No. 949 of 5 October 1993. The Financiadora de Estudos e Projetos  (FINEP), public 
enterprise linked to the MCTI created in 1967, is the administrator of the resources of the 
Scientific and Technological Development Fund ( Fundo Nacional de Desenvolvimento Científico e 
Tecnológico , FNDCT). 
3.210.  The FINEP grants refundable and non-refundable financing to all stages and dimensions of 
the scientific and technological development cycle: basic research, applied research, innovation 
and development of products, and services an d processes. The FINEP also supports the 
development of technology-based companies, the establishment of technological parks, the implementation of research, development, and innovation processes in already established 
companies, and the development of markets. In  addition, from 2012 the FINEP began offering 
support for the setting up of a first industrial unit, for incorporations, and for mergers and joint ventures. 
3.211.  Repayable loans are financed with the FINE P's own resources or from transfers from other 
sources. Non-reimbursable funding is made with funds from the FNDCT, currently formed mainly by sectorial funds for science, technology, and innovation (S, T&I), intended for non-profit 
institutions, programmes. Financing proposals must be submitted in response to public calls or 
invitations. 
3.212.  The sectoral S, T&I funds are an importan t R&D financing mechanism in Brazil since their 
establishment in 1999. The income of the fund s stems from contributions levied on the 
exploitation of natural resources, portions of the IPI tax on certain sectors, and of the CIDE 
applied on remunerations for the use or acquisition of technological knowledge/technology transfer from abroad.
249 There are 16 such funds, each corresponding to a specific area and with its own 
resources (Table 3.17). The resources allocated to each of the funds are deposited with the FNDCT 
(with the exception of the Telecommunications Fund ) and managed by the FINEP. A regional policy 
is followed for the allocation of the funds: at least 30% must be invested in the north, north-east, 
and mid-west regions, and there is a special fund for the Amazon region, targeted at institutions 
operating in the states of Amazonas, Rondônia, Roraima, and Acre. Resources may not be transferred between funds. 
                                               
248 SUFRAMA (2012). 
249 FINEP online information. Viewed at: h ttp://www.finep.gov.br/pagina.asp?pag=30.10. WT/TPR/S/283 • Brazil 
 
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  Table 3.17 Sectoral science, technology , and innovation (S, T&I) funds, 2012 
Fund/Law Resources 
Petroleum and Natural Gas Fund (CT-PETRO), 
Law No. 9,478 of 6 August 1997 25% of the share of the value of royalties exceeding 5% of 
the production of petroleum and natural gas 
Energy Fund (CT-ENERG), 
Law No. 9,991 of 24 July 2000 0.4% of the net value of the bills issued by concessionaries 
for the generation and transmission of electricity; 0.3% for 
distribution 
Hydric Resources Fund (CT-HIDRO), 
Law No. 9,993 of 24 July 2000 4% of the financial compensation of electricity generation 
companies 
Land Transport Fund (CT-TRANSPORTES), 
Law No. 9,992 of 24 July 2000 10% of the receipts obtained by the National Transportation 
Infrastructure Department stemming from contracts for the 
use of roads by communications and telecommunications 
systems 
Mining Fund (CT-MINERAl), 
Law No. 9,993 of 24 July 2000 2% of the financial compensation of the mining sector 
Spatial Fund (CT-ESPACIAL), 
Law No. 9,994 of 24 July 2000 25% of revenues of spatial operations 
Telecommunications Technology Development Fund 
(FUNTTEL), 
Law No. 10,052 of 28 November 2000 0.5% on telecommunications providers bills, and 1% on 
bills for services provided through telephone links 
Information Technology Fund (CT- INFO), 
Law No. 10,176 of 11 January 2001 0.5% on informatics enterprises' bills 
University and Enterprise Fund (CT-VERDE AMARELO), 
Law Nos. 10,168 and 10,332 of 29 December 2000 
and 19 December 2001 50% of the CIDE on remittances abroad of royalties, plus 
43% of the IPI on informatics products 
Infrastructure Fund (CT-INFRA), 
Law No. 10,197 of 14 February 2001 20% of other funds 
Water Transport and Naval Construction Fund (CT- 
Aquaviário) 3% of the AFRMM tax accruing to the Merchant Marine Fund 
(FMM) 
Amazon Fund (CT-AMAZÔNIA), 
Law No. 8,387 of 30 December 1991, Law 
No. 10,176, of 11 January 2001, and Decree 
No. 4,401, of 1 October 2002 At least 0.5% of companies operating in the Manaus Free 
Trade Zone that produce informatics-related goods and 
services 
Biotechnology Fund (CT-Biotecnologia); Agri-
business Fund (CT-AGRONEGÓCIO); Aeronautical Fund, (CT-AERONÁUTICO); Health Fund (CT SAÚDE), Law No. 10,332 of 29 December 2001 17.5% of proceeds collected by the CIDE (section (2)(v)) to 
be devoted to the Agri-business fund; 17.5% to the Health Fund; 7.5% to the Biotechnology Fund; and 7.5% to the Aeronautical Fund 
Source: FINEP online information. Viewed at : http://www.finep.gov.br/pagina.asp?pag=30.10. 
3.213.  One of the FINEP's most important reimbursable financing programmes is the INOVA Brasil 
Programme  (Programa de Incentivo à Inovação nas Empresas Brasileiras),  which aims to support 
strategic investments by Brazilian companies in innovation.  Its guidelines are in the Plano Brasil 
Maior  and are the following: (i) increased national and international competitiveness; (ii) increased 
R&D activities carried out in the country with investments consistent with the technological dynamics of the sectors in which they operate; and (iii) innovation with regional relevance or 
inserted in MCTI's programme objectives. Beneficiaries are domestic companies under domestic 
capital control and those under foreign capital control whose activities are specified in Decree No. 2,233 of 23 May 1997 and its amendments.
250 
3.214.  The INOVA Brasil programme is managed under three "action lines" in accordance with the 
FINEP's new operational policy for 2012-14: (a) Pioneer Innovation ( Inovação Pioneira ), aimed at 
supporting the technology development cycle, from  basic research to the development of markets 
for innovative products, processes, and services, being essential that the end result is, at least, an 
innovation for the domestic market; (b) Continuous Innovation ( Inovação Contínua ), which grants 
support to companies wishing to implement R&D activities or continuous R&D investment 
                                               
250 Decree No. 2,233 of 23 May 1997 defines industries and services that are considered of national 
interest. They include the following public infrastruct ure services: (a) exploitation of energy sources, 
generation, transmission, and distributi on of energy of any kind; (b) any ki nd of telephony service; (c) ports 
and transport systems, including cargo and passengers; and (d) environmental sanitation. They also include 
industrial complexes in the following areas: (a) chemical-petrochemical (basic chemical industries, petrochemicals, fine chemicals, and fertilizers); (b) mineral and metallurgical; (c) automotive and auto spare 
parts; (d) agri-industrial and forest ry (agricultural products, food, be verages and wood panels, pulp and 
paper); (e) capital goods (equipment and components industries); and (f) electronics (electronic components industry, consumer electronic industries, information technology, telecommunication and automation). WT/TPR/S/283 • Brazil 
 
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  programmes by means of the installation of R&D centers or in collaboration with other R&D 
institutions; this line aims at fortifying medium and long-run R&D activities; and (c) Innovation and Competitiveness ( Inovação e Competitividade ) to support the development projects and/or 
improvement of products, processes, and services  projects, acquisition and/or absorption of 
technologies, so as to consolidate the culture of investment in innovation as a relevant factor in 
competitive business strategies.  
3.215.  Financing conditions vary according to the action line. For the Pioneer Innovation line, in 
late 2012, the interest rate was 4%, the period of amortization 84 months, with a grace period 
of 36 months, and the percentage financed by th e FINEP was up to 90% of the project. For the 
Continuous Innovation line the interest rate was 5%, the period of amortization up to 72 months, with a grace period of 24 months, and the percenta ge financed by the FINEP was also up to 90% 
of the project. For the Innovation and Competitiv eness line, the interest rate was a range between 
the TJLP and the TJPL + 2%, the period of amorti zation up to 60 months, with a grace period of 
24 months, and the percentage financed by the FINEP was up to 80% of the project.
251 
3.216.  The Assistive Technology Innovation Programme  (Programa de Inovação em Tecnologia 
Assistiva)  is aimed at financing technological development and innovation of products, processes 
and services for people with disabilities, olde r persons and persons with reduced mobility. The 
programme has a budget of R$150 million until 2014, of which R$90 million are offered as loans 
for Brazilian companies and R$60 million as non-re imbursable grants to universities and research 
centres. The programme finances up to 90% of pr ojects of between R$1 million and R$20 million, 
at interest rates between 4% and TJLP +3%. The amortization period is up to 84 months, with a 
grace period up to 36 months.  
3.217.  The INOVA PETRO programme is a joint initiative of the FINEP and the BNDES, with the 
technical support of PETROBRAS. Its goal is to support projects in R&D, engineering, use of 
technologies, production, product processes, and services for the development of Brazilian 
suppliers to the petroleum and natural gas produc tion chain. INOVA PETRO is open to Brazilian 
companies and/or affiliates with gross operating revenue (ROB) of more than R$16 million, 
individually or in association, that have an interest in undertaking the production and marketing of 
products or services resulting from technologies related to topside processing technologies, sub-sea equipment, and down-hole equipment and serv ices. Business projects with ROB below this 
threshold are eligible only if developed jointl y with another company and/or group with ROB 
exceeding this value. In the case of an associ ation between a domestically controlled firm and a 
foreign undertaking and/or controlled by a head office abroad, support may be granted only for 
projects that involve an effective technology transfer. The programme is scheduled to continue 
until 2017. Projects must be developed in the Brazilian territory, have a minimum budget of 
R$1 million, and a maximu m implementation period of 60 months. The FINEP and the BNDES may 
finance up to 90% of the total value of the pr oject. There are R$3 billion available for the 
programme, 50% provided by each institution. 
3.218.  The Economic Subvention to National innovation Programme  (Programa de "Subvenção 
Econômica à Inovação Nacional")  has as its goal the promotion of innovation and productivity 
enhancement among Brazilian companies. The progra mme consists of financial support in the form 
of non-reimbursable resources to share the costs and risks inherent in innovation activities. The 
programme's regulatory framework is contained in Law No. 10,973 of 2 December 2004, regulated by Decree No. 5,563 of 11 October 2005 (Innovation Law), and in Law No. 11,196 
of 21 November 2005, regulated by Decree No. 5, 798 of 7 June 2006. Grants are awarded through 
tenders made available on the FINEP site. The value of projects financed may be between R$500,000 and R$10 million; but the value may not exceed the company's turnover or social 
capital. Details of the programme are in a manual prepared by the FINEP in October 2010.
252 
In 2011, approved projects totalled R$239.6 million.253 
                                               
251 FINEP online information. Viewed  at: http://download.finep.gov.br/programas/inovaBrasil/politica_ 
operacional_tabelaconsolidada_22ago.pdf. 
252 FINEP (2010). 
253 MICTI (2012). WT/TPR/S/283 • Brazil 
 
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  3.4.2.6  BNDES credit facilitation schemes 
3.219.  The BNDES promotes Brazil's economic and social development through tailored financing, 
equity participation, non-reimbursable financial support, and guarantees. Eligibility for BNDES support is subject to few restrictions regarding operations: the negative list comprises 
banking/financial activities, weapons trade, establishments for adult entertainment, and gambling. 
Support granted by the BNDES over 2008-12 totalled R$687 billion (some US$344 billion) (Table 3.18) 
Table 3.18 Brazilian development bank support, 2008-12  
(R$ billion)  
 2008 2009 2010 2011 2012 
Industry 39 63.5 54 43.8 47.7 
Infrastructure 35.1 48.7 52.4 56.1 52.9 
Trade/services 11.2 17.3 27.1 29.2 44.0 
Agriculture 5.6 6.9 10.1 9.8 11.3 
Other market operations 1.4 1 24.8 0.8 0.1 
Total 92.2 137.4 168.4 139.7 156.0 
Source: BNDES (2011), Annual Report  2011.  Viewed at: http://www.bndes.gov.br; and information 
provided by the Brazilian authorities. 
3.220.  BNDES activities are funded by returns on its operations; resources raised in foreign 
markets; a portion of all contributions to the Workers’ Assistance Fund (FAT); and public funds injected by the Federal Government, its sole shareholder, either in the form of paid-in capital or debt instruments. At end 2011, government sources accounted for 81.7% of BNDES’s total capital, 
and resources raised abroad for 3.6%. In 2009-11, the National Treasury lent R$246.3 billion to 
BNDES in the form of government bonds linked  to the long-term interest rate (TJLP).  
3.221.  The BNDES maintains a number of schemes that facilitate access to credit. Operations 
under these credit lines may be carried out directly  by the BNDES, or through accredited financial 
institutions. Projects eligible for credit include: implementation, expansion, and modernization of fixed assets; new machinery and equipment produc ed in Brazil and accredited by the BNDES; 
production of certain goods for export
254; offering or development of services for export; foreign 
commercialization of eligible goods; and working capital associated with a fixed investment. A number of items are eligible for credit, under certain conditions, including importation of equipment, through specific lines and/or guarantees; expenses incurred from the importation of 
equipment; and implementation and/or expansion of  foreign activities. Indirect schemes (through 
the banking sector) represented 53.8% of tota l financing over 2007-12, and direct schemes 
accounted for the rest. The BNDES FINEM programme was the largest, accounting for 34.8% of 
financing, followed by the FINAME, with 25.1% of the total (Table 3.19). 
3.222.  Among the credit lines operated by the BNDES through financial institutions, the Automatic 
BNDES offers financing of up to R$10 million for the implementation, expansion, modernization or 
company relocation projects, including the acquisition of new machinery and equipment of 
domestic manufacture, accredited by the BNDES,  and associated working capital. The FINAME 
provides financing, without a limit in value, for individual acquisitions of new machinery and equipment of domestic manufacture, accredited by the BNDES. In the case of the Automatic 
BNDES, financing is limited to 90% for the public administration, Brazilian citizens, and micro, 
small, and medium-sized, domestically controlled enterprises, and to 80% for large domestically controlled enterprises and companies with foreign-controlled capital.
255 Products with a domestic 
content, in value terms, of at least 60% are automatically eligible for financing, while products 
with local content below the threshold are subject to a non-automatic analysis procedure.  
 
                                               
254 This includes most manufactured products. See BNDES online information. Viewed at: 
http://www.bndes.gov.br/english/ bndes/financeable_products.pdf. 
255 BNDES online information. Viewed at: h ttp://www.bndes.gov.br/english/finame.asp. WT/TPR/S/283 • Brazil 
 
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  Table 3.19 BNDES disbursements by credit scheme, 2007-12 
(R$ million) 
Credit scheme 2007 2008 2009 2010 2011 2012 2007-12 
Direct Schemes 26,910.9 42,414.4 78,200.5 74,663.0 54,624.1 71,910.2 348,723.1 
BNDES FINEM 22,028.5 28,577.8 65,082.4 37,597.2 45,217.2 62,598.7 261,101.8 
BNDES-EXIM 1,321.7 3,276.6 4,269.5 4,151.5 4,657.7 4,343.2 22,020.2 
BNDES Não reembolsável 62.5 105.2 137.7 203.8 271.6 367.3 1,148.1 
BNDES Mercado de Capitais 3,498.1 10,454.8 8,710.9 32,710.5 4,477.6 4,601.0 64,452.9 
Indirect schemesa 37,980.9 48,463.5 58,155.9 93,759.7 84,249.3 84,082.1 406,691.4 
BNDES FINAME 17,030.8 22,159.3 20,678.3 46,759.0 46,521.9 36,681.0 189,830.3 
BNDES FINEM 5,111.6 6,041.1 9,874.7 7,790.0 6,275.4 7,978.1 43,070.9 
BNDES AUTOMÁTICO 5,077.3 5,515.0 10,314.7 13,407.1 11,273.1 16,422.0 62,009.2 
BNDES FINAME AGRÍCOLA 2,071.3 2,701.7 2,813.6 5,361,4 5,419.9 6,737.2 25,108.7 
BNDES-EXIM 6,734.7 9,554.7 11,360.3 15,526.9 6,726.3 6,558.2 56,461.1 
BNDES FINAME Leasing 1,446.0 1,645.9 635.7 601.3 458.6 162.1 4,949.6 
Cartão BNDES 509.2 845.7 2,478.6 4,314.0 7,574.1 9,543.4 25,265.0 
TOTAL of above  64,891.8 90,877.9 136,356.4 168,422.7 138,873.4 155,992.3 755,414.5 
a Through the banking sector. 
Source: BNDES online information. Vi ewed at: http://www.bndes.gov.br. 
3.4.2.7  Other schemes 
3.223.  The Special Regime for the Exportation and Importation of Goods Destined to the 
Exploration of Petroleum and Natural Gas (REPETRO) was created by Law No. 9,478 
of 6 August 1997. The REPETRO allows for the "ficti tious exportation" and subsequent importation, 
under the temporary admission customs procedure, of goods produced in Brazil sold in foreign 
currency to a person domiciled abroad for use in the exploration of petroleum and natural gas in 
Brazil. The REPETRO also allows the application of  the drawback regime on imported inputs and 
parts used to produce those goods. The regime is granted with the waiver of all import taxes until 31 December 2020.
256 The REPETRO is really a special case of the temporary admission customs 
procedure; the difference with the regular case, is that the latter permits only a partial exemption 
of the customs duty and the IPI, which must be paid proportional to the period of time of the admission. Under the REPETRO, the application of federal and state taxes on these goods is totally 
suspended, provided that certain conditions are fulfilled.  
3.224.  Law No. 12,249 of 11 June 2010 created the Sp ecial Regime for the Aeronautical Industry 
(Regime Especial para a Indústria Aeronáutica Brasileira , RETAERO). The beneficiaries are 
companies that produce parts, tools, components , equipment, systems, subsystems, inputs and 
raw materials, or services to be employed in the maintenance, conservation, modernization, 
repair, overhaul, conversion, and industrialization of aircraft classified under NCM heading 88.02. 
The law provides benefits also for companies providing goods or services that are used as inputs in 
the production of these goods. In this case, the company must be a "preponderant supplier" to the 
aircraft industry; that is it must obtain at least 70% of its income from sales to the industry, including exports. Benefits include a suspension of the IPI for purchases in the domestic market 
and for imports, as well as of PIS/Pase p and COFINS contributions (including PIS/ Pasep-
Importação and COFINS- Importação ). The suspension becomes a zero-rated regime after the 
employment or use of the goods acquired or im ported under RETAERO, on goods used for the 
maintenance, upkeep, repair, modernization, industrialization, conversion and overhaul of aircraft 
classified in heading NCM 88.02. 
3.225.  Law No. 12,715 of 17 September 2012, published in the Official Journal  on 
18 September 2012 introduced a number of incentive programmes, including the Programme of 
Incentives Technological Innovation and Production Strengthening in the Automotive Industry 
(INOVAR-AUTO) (Programa de Incentivo à Inovação Tecnológica e Adensamento da Cadeia Produtiva de Veículos Automotores), the Special Taxation Regime for the National Broadband 
Programme for the Deployment of Telecommuni cations Networks (REPNBL-Redes) (Regime 
Especial de Tributação do Programa Nacional de Banda Larga para Implantação de Redes de Telecomunicações), and the Special Incentives Regime for Computers for Educational Use (Regime Especial de Incentivo a Computadores para Uso Educacional (REICOMP).  
                                               
256 Decree No. 5,138, of 12 July 2004 extended the period from 31 December 2005. WT/TPR/S/283 • Brazil 
 
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  3.226.  The INOVAR-AUTO was created with the purpose of supporting technological development, 
innovation, safety, environmental protection, ener gy efficiency, and the qu ality of vehicles and 
automotive parts. INOVAR-AUTO is set to expire on 31 December 2017; its beneficiaries are companies that produce or plan to produce in Brazil products classified under headings 87.01 
to 87.06 of the Tax on Industrial Products-TIP I schedule, approved by Presidential Decree 
No. 7,819 of 3 October 2012, or commercialize them. To benefit from INOVAR-AUTO a joint permit by the MDIC and the MCIT is required. This permit  is contingent upon meeting energy efficiency 
standards for the vehicles produced or commercialized and the commitment to making R&D and 
infrastructure investments in Brazil, as well as participating in a nationwide vehicle labelling programme, except for diesel or semi-diesel vehicles. Permits have a 12-month validity and are renewable for 12-month periods. Approved companie s may benefit from IPI credit for expenses on 
research, technological development, strategic inputs, tooling, engineering, and industrial 
technology. This credit is not subject to PIS/Pasep or COFINS contributions, nor must it be computed for income tax purposes.  
3.227.  Law No. 12,715 also created the REPNBL-Redes for deployment of new projects, or 
expansion or modernization of telecommunications networks supporting broadband internet access, including satellite earth stations that contribute to the implementation of the national 
broadband programme (PNBL). The regulations for the implementation of this programme were 
still in drafting phase in late 2012 and are expected to be presented to the Ministry of 
Communications by 30 June 2013. Foreseen benefits include the suspension of the COFINS/PIS and the IPI on equipment acquired in the domestic  market by REPNBL-Redes beneficiaries. Also 
under the programme, the bills for telecommunications services using radio frequencies between 
451MHz and 458 MHz, and 461 MHz to 468 MHz, as well as through small satellite earth stations that contribute to the goals of the PNBL, are ex empt from federal taxes until 31 December 2018.  
The gross revenues from retail sales of comp onents and network equipment, handsets, and 
transceivers dedicated to telecommunications services provided by means of those radio frequencies or through small satellite earth stations are also exempt from federal taxes until 
31 December 2018.  
3.228.  The REICOMP is aimed at increasing th e use of computers in schools. The REICOMP's 
beneficiaries are enterprises that are manufacturers of computer equipment. The REICOMP suspends the IPI on the output of the industrial plant supplying inputs or parts for the products, as 
well as PIS and COFINS contributions on the sale of inputs and services linked to the production of 
computer equipment. 
3.4.3  State-owned enterprises, privatization, and state-trading 
3.229.  Brazil reported ten state-trading enterprises in its 1996 full notification to WTO members 
under Article XVII of the GATT 1994 and the Unders tanding on the Interpretation of Article XVII.
257 
Brazil made an updating notification in December 1997, announcing the removal of three 
companies from the list.258 As at August 2012, Brazil had issued no updates or new notifications 
under these provisions. In the context of the Wo rking Party on State Trading Enterprises, Brazil 
received a question from a WTO Member concerni ng its overdue notifications, but had not yet 
responded as at the time of writing.259 For the present Review, the Brazilian authorities noted that 
the existing state-trading enterprises are: PETROBRAS; BR Distribuidora; COBRA; CONAB; CMB; 
and ELETROBRAS (Table 3.20).  
3.230.  The INB ( Indústrias Nucleares do Brasil ) was removed from the list of state-trading 
enterprises provided by the Brazilian authorities for the Review. The authorities indicated that it 
was removed from this list because all of its production is sold to ELETRONUCLEAR, a branch of ELETROBRAS. The company, which is virtually fully owned by the Government, operates in the 
uranium production chain. It holds the exclusive right to import and export nuclear material, in 
accordance with the state monopoly set by Law No. 4,118 of 27 August 1962.
260  
 
                                               
257 WTO document G/STR/N/1/BRA, 21 March 1996. 
258 WTO document G/STR/N/3/BRA, 11 December 1997. 
259 WTO document G/STR/Q1/BRA/7, 17 October 2011. 
260 INB online information. Viewed at: http:// www.inb.gov.br/pt-br/W ebForms/default.aspx. WT/TPR/S/283 • Brazil 
 
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  Table 3.20 Key features of Brazilian state-trading enterprises (STEs) 
STE  State 
participation Key features 
PETROBRAS 
(Petroleo Brasileiro) 64% of voting 
shares (as of 2011) Held a monopoly over the importation of petroleum for over three 
decades.a Since 1997, any company established in Brazil may 
import and export petroleum and derivatives, provided it has an 
authorization from the Government. However, PETROBRAS continues to hold a dominant position in hydrocarbons trading. 
In 2010, PETROBRAS traded 93.5% of the oil imported into Brazil.b 
BR Distribuidora 
(Petrobras Distribuidora )  100% owned by 
PETROBRAS Created in 1971 as a subsidiary of PETROBRAS. Responsible fo r 
production and commercialization of petroleum derivatives, 
including export and import activities.c No imports reported. 
Accounted for 25% of total exports of petroleum derivatives 
in 2012. 
COBRA 
(Computadores e Sistemas 
Brasileiros ) 99.95% of shares 
owned by Banco 
do Brasil (public 
bank with 50.73% of voting shares owned by the National Treasury Currently a subsidiary of BANCO DO BRASI
L. Deals with production 
and development of information technology products, and provision 
of IT services. Imports digital equipment. Does not have any 
exclusive rights.  
CONAB 
(Companhia Nacional de 
Abastecimento ) 100% Responsible for managing agricultural and supply policies with the 
objective of meeting the basic needs of the Brazilian society, while 
preserving market mechanisms. One of its functions is to 
coordinate policies regarding strategic buffer stocks of agricultural 
goods. May import certain food products under exceptional 
circumstances.d 
CMB 
(Casa da Moeda do Brasil ) 100% In accordance with Law No. 5,895 of 19 June 1973, the CMB has 
exclusive rights over the manufacture of banknotes, coins, postal and fiscal stamps, and government bonds. Exports banknotes and 
other products, and imports of raw materials, equipment, and other 
inputs.e 
ELETROBRAS 52% of voting 
shares (as of 
2010) Exports and imports electricity. Private companies authorized by 
the ANEEL may also engage in these activities.f ELETROBRAS does 
not have exclusive rights for imports and exports of electricity.  
a PETROBRAS online information. Viewed at: http://www.petrobras.com.br/minisite/memoria/ 
comercializacao/index.html. 
b Petrobras online information. Viewed at: http://www.petrobras.com.br/rs2010/pt/ relatorio-de-
sustentabilidade/desempenho-operacional/balanco-de-nossas-atividades/refino-e-comercializacao/. 
c PETROBRAS online information.  Viewed at: http://www.petrobras.com.br/pt/quem-somos/perfil/ 
principais-subsidiarias/. 
d Federal Official Gazette  of 26 August 1994; and WTO document G/STR/N/1/BRA, 21 March 1996. 
e WTO document G/STR/N/1/BRA, 21 March 1996. f Law No. 9,648 of 27 May 1998. 
Source: WTO Secretariat, based on informatio n provided by the Brazilian authorities. 
3.231.  Two state-owned enterprises involved in in ternational trade activities were created during 
the review period. In 2008, the Government established the National Center for Advanced 
Research in Electronics (CEITEC). This company, which began its activities in 2009, produces and 
commercializes semiconductors for the domestic and international market. In August 2010, the Brazilian Congress authorized the creation of Pr é-Sal Petróleo S.A. (PPSA), a fully state-owned 
company responsible for managing contracts under the production-sharing regime for oil and gas 
(Chapter 4.4). Among other activities to be perf ormed on behalf of the Federal Government, the 
PPSA will have exclusive rights to manage and conclude contracts for the commercialization of hydrocarbons generated under the production-sharing regime.
261 In the exercise of this function, 
the PPSA has been charged with overseeing th e implementation of Brazil's oil and gas 
commercialization policy. In the case of natural gas originating from production-sharing contracts, the Law determines that Brazil's commercialization policy must give priority to the supply of the 
domestic market.
262 At the time of writing, the PPSA was not yet in operation.   
                                               
261 Law No. 12,304 of 2 August 2010. 
262 Law No. 12,351 of 22 December 2010. WT/TPR/S/283 • Brazil 
 
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  3.232.  Since 1990, when the Brazilian Privatization Programme (PND) was put in place, 41 federal 
state-owned enterprises have been privatized. The latest major privatization occurred in 2005, when the Banco do Estado do Ceará S.A. wa s sold to private commercial bank BRADESCO.
263 
3.233.  The Brazilian State still controls a relatively large number of companies involved in a wide 
range of activities, including electricity, hydrocarbons, port services, financial services, 
transportation, and health services. At end 2010,  t h e  M i n i s t r y  o f  P l a n n i n g ' s  D e p a r t m e n t  o f  
Coordination and Control of State Enterprises (DEST) reported the existence of 122 majority 
government-owned enterprises at the federal level, up from 114 in 2008.264 An independent 
estimate conducted by the Brazilian press in  2011 indicated that the Federal Government 
controlled 276 companies through majority-voting capital ownership.265 In addition, a large 
number of sub-federal companies are owned by stat e and municipal governments. In the State of 
São Paulo alone, there were 19 government-owned companies in 2008, according to an IMF 
study.266 
3.234.  State-owned companies contribute signific antly to employment and GDP in Brazil. In 2010, 
federal state-owned companies invested R$83.9 billion, amounting to 2.3% of GDP.267 In the same 
year, the 122 companies controlled by the Federal Government employed approximately 497,000 people, a 16.9% increase over 2006.
268  
3.235.  Nine of the ten federal state-owned companies reporting the largest net revenues in 2010 
operated in the energy sector. Six of them we re linked to PETROBRAS and three to ELETROBRAS. 
According to the DEST, 17 federal state-owned companies are dependent on Federal Treasury 
funding for their operations.  
3.236.  Since 2008, Congress has authorized the creation of at least six new state-controlled 
companies. In addition to CEITEC and PPSA, the new enterprises include: EBC, a public 
broadcasting company; EPL, a research and logistics company to promote high-speed railways 
services; ABGF, responsible for managing funds and guarantees; AMAZUL, which is developing 
nuclear technology and submarines for the Brazilian Navy; and EBSERH, which manages hospital services (Table 3.21). 
Table 3.21 State-owned ente rprises created since 2008 
Legal basis Ministry/ body 
responsible Area of activity Minimum 
State 
participation Monopoly/exclusive rights 
Centro Nacional de Tecnologia El etrônica Avançada S.A. (CEITEC)  
Law No. 11,759 of 
31 July 2008  Ministry of Science, 
Technology and 
Innovation  Research, production 
and commercialization 
of semiconductors  Must be 
majority 
government-
owned  May receive government funds 
aimed at fostering technological 
development.  
Empresa Brasil de Comunicação (EBC) 
Law No. 11,652 of 
7 April 2008  Secretariat for Social 
Communication of 
the Presidency of the 
Republic  Provision of 
broadcasting services  51% of ordinary 
shares  Can be contracted by 
government bodies without prior 
tendering procedures.  
Pré-Sal Petróleo S.A. (PPSA) 
Law No. 12,304 of 
2 August 2010  Ministry of Mines and 
Energy  Management of 
contracts under the oil 
and gas production-
sharing regime  100%  Exclusive rights to conclude 
contracts for the 
commercialization of 
hydrocarbons extracted under 
production-sharing.  
                                               
263 DEST online information. View ed at: http://www.planejamento.go v.br/secretarias/upload/Arquivos/ 
dest/estatistica/UnivEst_privatizadas.pdf. 
264 DEST (2011). 
265 EPOCA online information. Viewed at: http://editora.globo.com/premios/2011/download/finalistas/ 
economia/284647.pdf. 
266 IMF (2008). 
267 Ministry of Planning, Budget and Management on line information. Viewed at: http://www.plane 
jamento.gov.br/secretarias/upload/Arquivos/dest/serie_historica_120223.pdf; and IBGE online information. 
Viewed at: http://www.ibge.gov.br/home/presidencia/noticias/noticia_visualiza.php?id_noticia=1830&id_ 
pagina=1. 
268 DEST (2011). WT/TPR/S/283 • Brazil 
 
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  Legal basis Ministry/ body 
responsible Area of activity Minimum 
State 
participation Monopoly/exclusive rights 
Empresa de Planejamento e Logística S.A. (EPL)  
Law No. 12,404 of 
4 May 2011, 
Provisional 
Measure No. 576 of 
15 August 2012  Ministry of Transport  Planning and promotion 
of high-speed railway 
services  50% + 1 of 
ordinary shares  Can be contracted by 
government bodies without prior 
tendering procedures.  
Agência Brasileira Gestora de Fundos e Garantias S.A. (ABGF)  
Law No. 12,712 of 
30 August 2012  Ministry of Finance  Management of funds 
and guarantees  Must be 
majority 
government-
owned  May be granted preferential 
treatment by insurance 
regulation authorities.  
Amazônia Azul Tecnologias de Defesa S.A. (AMAZUL)  
Law No. 12,706 of 
8 August 2012  Ministry of Defence  Development of 
technologies for the 
Brazilian Nuclear 
Program and the Navy  100%  May receive direct funds from 
the Navy Fund and the Federal 
Government.  
Empresa Brasileira de Serviços Hospitalares (EBSERH)  
Law No. 12,550 of 
15 December 2011 Ministry of Education Management of federal 
university's hospitals 
service provision. 100%  Receives funds from the Federal 
Budget. 
Source: WTO Secretariat, based on informatio n provided by the Brazilian authorities. 
3.4.4  Government Procurement 
3.4.4.1  General features 
3.237.  In 2011, procurement expenditure by the Brazilian Federal Government totalled 
R$72.7 billion (1.8% of GDP), up from R$45.6 billion in 2007. Procurement data concerning most 
federal government bodies is monitored by the Ministry of Planning through the Integrated System 
for the Administration of General Services (SIASG ). Procurement by government bodies registered 
under the SIASG totalled R$51.8 billion in 2011, of which 50.2% for goods and 49.8% for services.
269  
3.238.  Since Brazil operates a decentralized procurement system, data provided by the federal 
authorities does not include state and munici pal governments. According to the OECD, by 
conservative estimates, overall government procurement expenditures amount to 8.7% of Brazil's 
GDP. The OECD calculates that the federal government contributes 1.6% of GDP; the remaining 
expenditures are incurred by state governments (1.5% of GDP), local governments (2.1%), and majority state-owned companies (3.2%).
270  
3.239.  Brazil is neither a party nor an observer to the WTO Plurilateral Agreement on Government 
Procurement (GPA). The authorities indicated that  Brazil has no plans to join the agreement. 
Under MERCOSUR, Brazil is engaged in negotiations on the Public Procurement Protocol, which is currently being revised (Chapter 2.5.2).
271 
3.240.  In 2011, the federal administration's procurement practices were assessed by the OECD in 
its Public Integrity Review. The study commended Brazil's progress in promoting transparency and 
risk-management throughout the procurement cycle, but suggested efforts could be made to 
increase professionalism among public offi cials and develop performance indicators.272 The World 
Bank also conducted an assessment of Brazil's procurement regime in 2010, in which the country scored well in all covered areas. Nevertheless, the World Bank identified a number of areas for 
improvement, including issues concerning performance evaluation and appeal mechanisms.
273 
                                               
269 ComprasNet Online information. Viewed at: http://www.comprasnet.gov.b r/ajuda/Brasil_Econ%C3% 
B4mico_Relatorio_Dados_Gerais_Janeiro_a_Dezembro2011.pdf. 
270 OECD (2011). 
271 MERCOSUR online information. Viewed at: http://www.mercosur.int/innovaportal/file/4488/1/ 
comunicado_conjunto_presidentes_ep.docx. 
272 OECD (2011). 
273 World Bank (2010), Assessment of the Procurement Systems of the Brazilian Federal Government 
and the Brazilian State of São Paulo . Viewed at: http://siteresources.worldbank.org/INTPROCUREMENT/ 
Resources/278019-1311363656902/Brazil_OECD_Indicators_Proposed_Scores_June-07-2011(editor+ clean).pdf. WT/TPR/S/283 • Brazil 
 
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  3.241.  According to Brazilian legislation, all procuring agencies must be audited by their 
respective  controllers .274 Federal-level bodies are surveyed by the Federal Accounts Tribunal 
(TCU). Sub-federal bodies are subject to accounts tribunals established at the state or municipal 
level.275  
3.4.4.2  Legislation 
3.242.  Brazil's main procurement law is Law No. 8,666 of 21 June 1993 (Tendering Law), as 
amended most recently by Law No. 12,349 of 15 December 2010.276 According to Article 37 of the 
Brazilian Constitution, the procurement of goods, services, and public works must be conducted 
through tendering procedures, unless otherwise specified in the law. Article 170 indicates that preferential treatment may only be granted to  small enterprises established in Brazil. A 
constitutional provision allowing preferential treatment for national companies in public 
procurement was revoked by Constitution al Amendment No. 6 of 15 August 1995. 
3.243.  Brazil's 1993 Tendering Law indicates that in the unlikely case of equivalent offers, 
preference may be given to goods and services: (i) produced in Brazil; (ii) produced or supplied by 
Brazilian companies; (iii) produced or supplie d by companies that invest in technology 
development in Brazil.
277 Moreover, small enterprises controlled by a foreign holding company are 
not eligible for the preferential procurement rule s provided by the General Law on Micro and Small 
Businesses (Supplementary Law No. 123 of 14 Dece mber 2006). This law allows for preferential 
measures that may include quotas, preference margins of up to 10%, as well as tendering procedures completely restricted to small companies.
278  
3.244.  During the review period, the Government revised the procurement regime and introduced 
further changes that grant preferential treatment to goods and services produced in Brazil. Law 
No. 12,349 of 15 December 2010 significantly alte red the procurement legislation, including 
the 1993 Tendering Law, to make the granting of  preferences a permanent and important feature 
of the regime. Law No. 12,349 added a new objective to Brazil's procurement policy: in addition to 
seeking the most advantageous offer for the administration and ensuring equality under the law, public tendering must now promote national sust ainable development. In order to achieve this 
goal, the law allows the Government to grant preferential margins of up to 25% for goods and 
services produced nationally and in accordance with Brazilian technical standards. 
3.245.  The preference margins for particular products, services, and sectors are determined by 
the newly created Interministerial Commission for Public Procurement (CI-CP).
279 The definition of 
the actual margins must be based on studies that take into account a number of criteria, including 
job and income generation, effect on tax reve nues, as well as technology development and 
innovation performed in Brazil.280 The criteria for conferring national status to products or services 
are set out by Ordinances; the suppliers' origin is  not among these criteria. In tenders where the 
lowest-price offer does not meet the criteria, the preference margin is calculated on the basis of 
that offer's price. 
3.246.  As of September 2012, the Government had issued at least eight decrees establishing 
preference margins for certain national products in tendering procedures (Table 3.22). The measures fix margins ranging from 8% to 25%, and cover goods including textiles, apparel, footwear, backhoe loaders, motor graders, and pharmaceutical and medical products. 
3.247.  In principle, the above decrees apply only  to procurement contracts established under the 
federal administration. However, state and municipal governments may also adopt the preference margins set by the Federal Government. The federal authorities indicated that they were not 
aware of any such case. 
                                               
274 Article 113 of Law No. 8,666 of 21 June 1993. 
275 TCU online information. Viewed at: http://port al2.tcu.gov.br/portal/page /portal/TCU/ouvidoria/ 
perguntas_frequen tes/fiscalizacao_prefeituras. 
276 This law establishes general rules on procuremen t and administrative contracts related to public 
works, services, including ad vertising, procurement, alie nations, and rental services  at the federal, state and 
municipal levels. 
277 Law No. 8,666 of 21 June 1993. 
278 See WTO (2009), Chapter III (4)(v). 
279 Decree No. 7546 of 2 August 2011. 
280 Law No. 12,349 of 15 December 2010. WT/TPR/S/283 • Brazil 
 
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  Table 3.22 Decrees establishing preference margins for national products in public 
tendering 
Source: WTO Secretariat, based on information provided by the Brazilian authorities. 
3.248.  In the context of public tendering, national products are defined as those produced in accordance with a Basic Productive Process (PPB) or with rules of origin established by the Federal Government, which must follow MERCOSUR minimum standards.
281 The term national services 
apply to services supplied inside the Brazilian territory, under conditions to be determined by the 
Government.282 Under Law No. 12,349 of 15 December 2010 preference margins may be totally or 
partially extended to products and services coming from MERCOSUR countries in the future.  
3.249.  In addition to allowing for price preferences in certain areas, Law No. 12,349 
of 15 December 2010 also allows for procurement contracts in the technology and communication 
sector to be restricted to goods and services developed in Brazil and produced in accordance with the PPB. The restriction may be applied to contracts aiming at the implementation, maintenance, 
and development of information and communication systems defined as strategic by the 
Government. Currently, the measure may be used in tendering procedures under the National 
Broadband Programme (PNBL), which was established as strategic under Decree No. 7,175 of 12 May 2010.
283 
3.250.  According to the Tendering Law of 1993, public entities may use five procurement 
modalities: open tendering ( concorrência ); price consultation ( tomada de preços) ; invitation 
(convite) ; competition ( concurso ); and public auction ( leilão). Law No. 10,520 of 17 July 2002 
introduced the reverse auction ( pregão ) modality, which may be carried out in electronic and/or 
onsite formats. In general, the main factors fo r determining the modality to be employed are the 
value and the nature of the object being tendered.284 In practice, reverse auction is the preferred 
method for government procurement; its use was made compulsory for tendering of common 
goods and services by Decree No. 5,504 of 5 August 2005. 
3.251.  Generally, tendering procedures may be designated as national or international at the 
Government's discretion. However, procurement contracts funded by international institutions or 
cooperation agencies are necessarily set as international tendering and are subject to the rules of 
the financing institution. To take part in national tendering, foreign suppliers must be legally established in Brazil.
285 In the case of international tendering, foreign companies must have legal 
representation in Brazil or be associated with a Brazilian firm.286 In 2011, international tendering 
                                               
281 For more details on the PPB see Chapter 3.4.2.1. 
282 Decree No. 7,546 of 2 August 2011. 
283 Ministry of Communication online informatio n. Viewed at: http://www.mc.gov.br/component/ 
content/article/ 36-noticias/ 23206-telebras-assina-mais-um-contrato-para-pnbl. 
284 The criteria to determine procurement methods are set out in Articles 22 and 23 of Law No. 8,666 
of 21 June 1993, as well as Article 1 of Law No. 10,520 of 17 July 2002.   
285 Ministry of Finance online information. View ed at: http://www.tesouro.fazenda.gov.br/siafi/ 
download/projetos_externos/Licitacoes_MP.pdf. 
286 WTO (2009), Chapter III (4) (v). Legislation Products covered  Preference margins  
Decree No. 7,601 of 
7 November 2011 Some textiles, apparel,  and footwea r 8% for all products listed in the 
decree 
Decree No. 7,709 of 
3 April 2012 Backhoe loaders and motor graders  15% for backhoe loaders and 
18% for motor graders 
Decree No. 7,713 of 
3 April 2012 Pharmaceutical products  8% to 20%, depending on the 
product 
Decree No. 7,756 of 
14 June 2012 Textiles, apparel, and footwea r 20% for all products listed in the 
decree  
Decree No. 7,767 of 27 
June 2012 Medical products 8% to 25% depending on the 
product 
Decree No. 7,810 of 20 
September 2012 Textiles, apparel, and footwea r 20% for all products listed in the 
decree  
Decree No. 7,756 of 14 
June 2012 Locomotives, wagons, trains,  and car parts for railways  20% for all products listed in the 
decree 
Decree No. 7,816 of 28 
September 2012 Some road tractors, transport trucks, fighting vehicles, 
road equipment, trailers, and ambulances 14% to 17% depending on the 
product WT/TPR/S/283 • Brazil 
 
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  accounted for 0.16% of the total value of procurement contracts signed by the Federal 
Government.287 
3.252.  Articles 24 and 25 of the 1993 Tendering Law foresee several situations in which the 
requirement to tender may be waived ( dispensa e inexigibilidade) . These include contracts with a 
low value, cases of emergencies, natural disasters, wars, and other exceptional circumstances.288 
3.253.  According to the Ministry of Planning, 37% of the total value negotiated in federal 
administration procurement contracts did not require tendering in 2011. Reverse auction was the 
main method employed in that year, accounting for 49.5% of the value of contracts. Open 
tendering and price consultations represented 12. 5% and 0.9% of tendering respectively, while 
invitation and contest accounted for less than 0.1%. No figures with regard to public auction were 
provided for 2011; the authorities indicated that this procedure is used for sales of pubic goods 
and hence there is no obligation to register them in the Federal System of Statistics of Public 
Procurement.289 
3.254.  Brazil has made significant progress in modernizing government procurement through the 
use of information technology. In 2011, nearly 96%  of federal government reverse auctions were 
conducted electronically. In addition, substantia l information on federal government procurement 
is available online to any interested party at the ComprasNet website, the Transparency Portal 
(Portal da Transparência ) and relevant agencies' websites. The law requires both federal and sub-
federal governments to publish tenders in advance in their respective  Official Gazettes  and, in 
some cases, in a widely circulated newspaper.290 In its 2010 assessment study, the World Bank 
rated access to information as one of the strongest components of federal procurement and noted 
that the mainstreaming of reverse auctions has he lped enhance the efficiency and transparency of 
Brazil's procurement system.291  
3.255.  Bidders and other interested parties may challenge a published award decision within two 
to five days, depending on the procurement modality.292 Complaints are first reviewed by the 
authorities that conducted the bidding process, which must decide on the protest within five days. Once the means of administrative recourse are exhausted, bidders may appeal to the Federal 
Accounts Tribunal (TCU), whose decisions are bind ing, although they may be appealed to the 
judiciary. TCU decisions are not subject to specific time frames, which may cause delays in the procurement process.
293  
3.256.  Majority state-owned companies must al so abide by the 1993 Tendering Law. However, 
they are exempt from the requirement to tender  for contracts concerning their core business 
activities.294 In addition, PETROBRAS is subject to a simplified procurement regime, which is 
governed by a Presidential Decree rather than the Tendering Law.295 Decree No. 2,745 of 
24 August 2008 allows PETROBRAS more flexibility when determining the modality to be used in 
tendering procedures. Furthermore, procurement by PETROBRAS is, in practice, affected by 
local-content requirements governing the oil and gas industry (Chapter 4.4.2).  
3.257.  During the review period, Brazil conducted two wind-energy auctions (in 2009 and 2010) 
as part of its Alternative Sources of Electric Energy Programme (PROINFA). Under auction terms, 
bidding projects were not allowed to use imported turbines with nominal capacity under 
                                               
287 ComprasNet Online information. Viewed at: http://www.comprasnet.gov.b r/ajuda/Brasil_Econ%C3 
%B4mico_Relatorio_Dados_Gerais_Janeiro_a_Dezembro2011.pdf. 
288 See WTO (2009) for more details on exce ptions to the obligation of tendering. 
289 ComprasNet Online information. Viewed at: http://www.comprasnet.gov.b r/ajuda/Brasil_Econ%C3% 
B4mico_Relatorio_Dados_Gerais_Janeiro_a_Dezembro2011.pdf. 
290 Transparency issues are regulated by Articles 20 and 21 of Law No. 8,666 of 21 June 1993, and 
Article 4 of Law No. 10,520 of 17 July 2002.   
291 World Bank (2010). 
292 Article 109 of Law No. 8,666 of 21 June 1993. 
293 World Bank (2010). 
294 Public Ministry of Accounts of the Federal Distri ct online information. Vi ewed at: http://www.tc.df. 
gov.br/MpjTcdf/noticias1.php?ACAO=ABRIRNOTICIA&ORDEM=160&PAGINA= 
295 PETROBRAS online information. Viewed at: http://fatosedados.blogspetrobras.com.br/2009/06/11/. WT/TPR/S/283 • Brazil 
 
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  1,500 kw.296 The authorities indicated that this was to  prevent the purchase of turbines with 
outdated technology. 
3.258.  In August 2011, the Government established a special procurement regime for 
international sporting events to be hosted by Brazil, including the 2014 FIFA World Cup and 
the 2016 Olympic Games in Rio de Janeiro. The objective of the regime is to increase the 
efficiency of public procurement and facilitate the organization of these events. The regime is 
regulated by Law No. 12,462 of 4 August 2011, which states that tendering should be conducted 
in line with the principle of national sustaina ble development. The law determines that bidders 
should strive as much as possible to include local labour force, technology and materials when calculating their price offers. There are no specific preference margins for national suppliers under Law No. 12,462. 
3.4.5  Intellectual property rights 
3.4.5.1  General features 
3.259.  Brazil is a net importer of IPR-intensive goods; its royalties and licence fee balance showed 
a deficit of US$2.71 billion in 2011 (Table 3.23). Cumulative credits in the 2007-September 2012 
period were US$2.83 billion, while debits totalled US$16.35 billion, with a deficit of US$13.52 billion.
297 There are no restrictions on royalty payments. 
Table 3.23 Balance of royalties and incomes, 2007-11  
US$ million 2007  2008  2009  2010 2011  
Royalties and licences (expenses)  -2,259.43 -2,697.17 -2,512.04 -2,850.25 -3,301.09 
Royalties and licences (income)  319.41 465.44 43.,81 397.21 590.77 
Royalties and licences (net results)  -1,940.02  -2,231.73  -2,078.24  -2,453.04 -2,710.32  
Source: Central Bank of Brazil. 
3.260.  Royalty revenue totalled US$3.15 billion in 2008-11, while expenses totalled 
US$10.27 billion (Table 3.24). Contracts for industrial  property rights (patents, industrial designs, 
use of trademarks), technology transfer and te chnical assistance must be registered by the 
National Industrial Property Institute (INPI) in order to have effect. In these contracts the 
economic conditions of the transaction and its technical aspects must be explicitly spelled out, as 
well as its subject, royalties, and periods of application and execution.  
Table 3.24 Balance of li censing contracts, 2008-11  
US$ million 2008 2009 2010 2011 
Use of trademarks 49.3 169.8 39.5 172.7 66.6 282.7 94.1 340.2 
Patent exploitation 12.8 186.8 1.2 184.2 6.9 211.7 9.7 298.2 
Technology supply 46.6 1,363.3 74.6 1,277.3 63.8 1,310.3 122.0 1,378.3 
Technical assistance services 611.0 592.2 689.6 536.3 605.2 546.9 653.1 790.7 
Franchising 706.0 115.8 2.8 105.2 821.0 192.5 1.2 219.2 
Total 720.3 2,427.8 807.7 2,275.8 1,573.5 2,544.1 880.2 3,026.5 
Source: Central Bank of Brazil. 
3.261.  In the context of this review, the author ities noted that Brazil and the World Intellectual 
Property Organization (WIPO) have an ongoing "country study" which analyses the relationship 
between intellectual property protection and vari ous aspects of economic performance. The study 
focuses on domestic innovation, the international and national diffusion of knowledge, and institutional features of the IP system and its economic implications. The project is being 
implemented by the Brazilian Institute of Applied Economic Research (IPEA) and the WIPO Office 
of the Chief Economist. 
                                               
296 ANEEL online information. View ed at: http://www.aneel.gov.br//aplicacoes/editais_geracao/edital_ 
geracao.cfm. 
297 Central Bank of Brazil online informat ion. Viewed at: http://www.bcb.gov.br/. WT/TPR/S/283 • Brazil 
 
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  3.262.  Brazil is a member of the World Intellectual Property Organization (WIPO) and a number of 
WIPO-managed intellectual property rights (IPRs) treaties.298 Brazil has also made IPR 
commitments under multilateral and regional treaties entered into alone or as a MERCOSUR party.
299 Brazil has not joined any WIPO-administered IPR treaties since its previous TPR. At the 
multilateral level, however, Brazil joined the Protocol (III) additional to the Geneva Conventions 
of 12 August 1949, and relating to the adoption of an additional distinctive emblem, which it 
ratified on 28 February 2010. 
3.263.  The TRIPS Agreement is part of Brazil's domestic law as it was incorporated into Brazilian 
legislation in December 1994.300 Brazil notified its main intellectual property laws and regulations 
to the TRIPS Council in 2000, and 2001.301 Brazil's IPR legislation was reviewed by the TRIPS 
Council in late 2001.302 During the review period Brazil made no notifications with respect to 
changes in legislation. Law No 11,484 of 31 May 2007 on Integrated Circuit Topographies had not 
been notified to the WTO as of December 2012.  In the context of this Review, the Brazilian 
authorities noted that they were working on an updated notification of their legislation to be 
submitted to the TRIPS Council. 
3.264.  Discussions regarding IPRs within MERCOSUR take place in Subgroup No. 7, which deals 
with subjects related to industrial policies aimed at contributing to the integration of industries and 
a common industrial policy.303 The Brazilian authorities have noted that, despite debates in recent 
years, no harmonization efforts have ensued.  
3.265.  Considerations of intellectual property are included in the Plano Brasil Maior featuring 
measures such as tax relief on investments, an increase in the availability of credit, and 
improvements to the regulatory framework for innovation. The aims are: to reduce costs and 
stimulate the productivity of companies; to foster foreign trade by facilitating credit and increasing access to technologies and markets; to attract investments in R&D; to improve the business 
environment by simplifying procedures for registra tion, legalization, and taxation. The Plan sets a 
number of targets including, in IPR/technology: to increase private companies’ investments in R&D from 0.59% of GDP in 2010, to 0.90% in 2014; and to increase the knowledge-intensive industry's 
share of total value added in the industrial se ctor, from 30.1% in 2009 to 31.5% in 2014. The 
authorities noted that the Brazilian Government has also been investing in the consolidation of the intellectual property system to contribute to the expansion of investments in R&D by providing 
legal certainty for inventors. 
3.4.5.2  Legal and institutional framework 
3.4.5.2.1  General laws 
3.266.  Brazil's legislation covers all the major aspects mentioned in the TRIPS Agreement 
(Table 3.25). In some of these, including copyrigh t, Brazil grants rights that exceed the minimum 
terms laid down in the Agreement. There have been no substantial modifications on intellectual property legislation since 2009. 
                                               
298 WIPO-administered treaties and entry into force: Nairobi Treaty on the Protection of the Olympic 
Symbol (10 August 1984); Patent Cooperation Treaty (9 April 1978); Convention for the Protection of Producers of Phonograms against Unauthorized Duplication of their Phonograms (28 November 1975); Strasbourg Agreement Concerning the International Patent Classification (7 October 1975); Convention Establishing the World Intellectual Property Organization (20 March 1975); Rome Convention for the Protection of Performers, Producers of Phonograms and Broadcasting Organizations (29 September 1965); Berne Convention for the Protection of Literary and Artistic Works (9 February 1922); Madrid Agreement for the Repression of False or Deceptive Indications of Sour ce on Goods (3 October 1896); and Paris Convention for 
the Protection of Industrial Property (7 July 1884). 
299 OAS Foreign Trade Information System (SICE) onli ne information. Viewed at: http://www.sice.org/ 
Trade/mrcsrac/. 
300 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP /Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. 
301 WTO documents IP/N/6/BRA/1, 24 March 2000; IP /N/1/BRA/2, 10 April 2000; IP/N/1BRA/C/1, 
IP/N/1/BRA/C/2, IP/N/1/BRA/I/1, IP/N/1/BRA/P/1, IP/N/1/BRA/P/3, and IP/N/1/BRA/P/4, 19 September 2000; IP/N/1/BRA/I/1/Add.1, 4 October 2001; and IP/N/REV.6/Add.1, 24 July 2002. 
302 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP /Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. 
303 For further information on the Subgroups, see: http://www.mercosur.int/msweb/00_ 
Dependientes/SGT7/PT/index.htm. WT/TPR/S/283 • Brazil 
 
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  Table 3.25 Overview of IPR protection, 2012  
Subject/Law Coverage Duration Exclusions and 
limitations Remarks 
Patents  
Industrial Property 
Law No. 9,279 of 
14 May 1996. 
Law No. 10,196 
of 2001. 
Decree 
No. 4,830/2003 Any invention that is 
new and involves an 
inventive step, is 
capable of industrial 
application and is 
capable of industrial 
application. 20 years from date 
of filing. Substances, mate rials, 
mixtures or products of any 
kind, and processes for their 
modification, when resulting 
from the transformation of 
the atomic nucleus; 
biological processes and 
natural living material; 
computer programmes per 
se. Compulsory licences 
may be granted in cases of 
anti-competitive behaviour, 
national emergency or in 
public interest. Law No. 10,196 of 
2001: prior approval 
from the Brazilian 
Health Surveillance 
Agency (ANVISA) for 
granting patents for 
medicines and its 
processes.  
Decree 
No. 4,830/2003 
amends Decree 
No. 3,201 of 
6 October 1999, which 
provides for the grant 
of compulsory 
licences. 
Industrial designs  
Industrial Property 
Law, Resolution 
No. 076 of 2000. 
Normative Act 
No. 161 of 2002 New ornamental form 
of an object or new 
ornamental 
arrangement of lines 
or colours whose 
visual configuration 
can be used in 
manufacture. 10 years from date 
of filing; may be 
extended for 
3 successive 5-years 
periods. Designs  contrary to morals 
and good customs, or of an 
ordinary shape of an object 
determined essentially by 
technical or functional 
considerations. Resolution 
No. 076/2000 
provides for the 
adoption of the 
international 
classification system. 
Normative Act No. 161 
of 2002 establishes 
the conditions for the 
registration of 
industrial designs. 
Utility models  
Industrial Property 
Law No. 9,279 of 
14 May 1996 New invention in a 
new shape or 
arrangement, capable 
of industrial 
application. 15 years from date 
of filing. Substances, materials, 
mixtures or products of any 
kind, and processes for their 
modification, when resulting 
from the transformation of 
the atomic nucleus; 
biological processes and 
natural living material.  
Trade marks      
Industrial Property 
Law, Normative 
Acts No. 150, 151 
of 1999. 
Resolutions No. 121 
of 2005 and No. 
260 of 2010 Visually perspective 
sign that distinguishes 
or certifies a good or 
service. 10 years,  renewable 
for equal successive 
periods. Crests, armorial bearings, 
emblems, flags, national 
and international 
monuments. Normative Act  No. 110 
of 2004 establishes 
rules for the 
recognition of famous 
marks. 
Geographic indications  
Industrial Property 
Law, Normative Act 
No. 075 of 2000 Name of a country or 
region used to 
designate a service or 
good whose 
characteristics or 
reputation are derived 
from the country or 
region. Undetermined.  Use restricted to the goods 
or service providers from 
the locality. Normative Act No.  075 
of 2000 establishes 
conditions for the 
registration of 
geographic 
indications. 
Copyright and related rights  
Law No. 9,610 of 
19 February 1998. 
Law No. 10,695 of 
July 2003 Text of literary, 
scientific or artistic 
works; musical 
compositions, 
audiovisual works, 
drawings, paintings, 
photographic works. 
No registration 
necessary. Life of the author 
plus 70 years as the 
general term of 
protection; term 
varies depending on 
the type or nature of 
the work. No authorization required 
where the name of the 
author is cited in the 
reproduction of current 
affairs, or the reproduction 
in one copy of short extracts 
from a work for the private 
use of the copier, provided 
that it is without intent for 
financial gain. Law No. 10,695 
amends the Criminal 
Code to include stiffer 
sanctions for copyright 
violations and to 
improve criminal 
procedures. 
Computer software  
Law No. 9,609 of 
19 February 1998.  
Normative Acts Nos. 
58 of 1998 and 278 
of 2011 Information in natural 
language or encoded, 
used in automatic 
machines for the 
manipulation of data. 50 years from 
1 January of the 
year following 
publication or, if this 
is unavailable, its 
creation.  Normative Acts 
Nos. 58 of 1998 and 
278 of 2011 establish 
the requirements for 
the registration of 
computer software. WT/TPR/S/283 • Brazil 
 
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  Subject/Law Coverage Duration Exclusions and 
limitations Remarks 
New plant varieties  
Plant Variety 
Protection Law 
No. 9,456 of 
25 April 1997 New plant varieties 
and derived plant 
varieties of any genus 
or species. 15 years from the 
grant of certificate, 
except for vines, 
fruit trees, forest 
trees, and 
ornamental trees, 
including, the 
mother graft 
thereof, for which 
the term is 18 years. May be subject to 
compulsory licences for 
three-year periods, subject 
to renewal. Guarantees the 
property right to any 
natural or legal person 
obtaining a new plant 
variety or essentially 
derived variety. 
Layout designs of integrated circuits  
Law No. 11,484 of 
31 May 2007. 
Normative Act 
No. 273 of 2011 Protection of layout of 
integrated circuits 10 years from 
application.  Normative Act No.  273 
of 2011 establishes 
the requirements for 
the registration of the 
layout design of 
integrated circuits. 
Undisclosed information  
Law No. 10, 603 of 
17 December 2002. 
Industrial Property 
Law No. 9,279 of 
14 May 1996 Undisclosed 
information related to 
pharmaceutical 
products for 
veterinary use, 
fertilizers, pesticides, 
their components and 
related products; 
protection against 
unfair commercial use 
of undisclosed 
information. 10 years for 
products that use 
new chemical or 
biological entities, 
five years for all 
others. Authorized use by ANVISA. Industrial Property 
Law No. 9,279 of 
14 May 1996 protects 
against unfair 
commercial use, 
information and data 
presented to the 
authorities for 
commercial approval 
Source:  WTO Secretariat, based on information provid ed by the INPI, WIPO, and WTO documents. 
3.4.5.2.2  Industrial property  
3.4.5.2.2.1  Main bodies 
3.267.  The National Industrial Property Institute (INPI), an autonomous federal agency under the 
MDIC, is responsible for implementing rules regulati ng industrial property. The INPI also provides 
advice regarding the advisability of signing, ra tifying, and terminating conventions, treaties, 
accords, and agreements on industrial property. It is responsible for granting and registering 
patents (inventions and utility models), industri al designs, marks, geographical indications, 
computer programs, and technology transfer or franchise contracts.304 Decree No. 7,356 
of 12 November 2010 reorganized the INPI, following which the INPI reorganized its technical 
divisions, increasing the number of specialized divisions in order to provide a more balanced 
division between examiners, and to better control quality and the methods. 
3.268.  In recent years, the INPI has worked with other industrial property offices in developing 
and consolidating PROSUR, a project focused on cooperation between industrial property offices in 
Argentina, Brazil, Chile, Colombia, Ecuador, Paraguay, Peru, Suriname, and Uruguay. PROSUR 
aims at: (i) establishing a forum for dialogue between offices; (ii) creating a common portal in order to offer a set of services for the participating countries, such as centralized search in 
interconnected databases; (iii) database interconnection; and (iv) collaborative examination of 
patent applications. The industrial property offices of PROSUR are also considering the possibility of collaboration in the examination of trademark applications. PROSUR’s current institutional 
framework is a cooperation agreement between the pa rticipating industrial property offices signed 
in Santiago, Chile, on 5 July 2012. PROSUR does not aim at this stage to harmonize procedures, but only to deepen cooperation among offices while maintaining their autonomy. 
3.4.5.2.2.2  Patents an d industrial designs 
3.269.  Patent and industrial design regulations are contained in Industrial Property Law No. 9,279 
of 14 May 1996, Law No. 10,196 of 2001, and Decree No. 4,830/2003. The patent protection term is the standard 20 years from the date of filing. Patentable matter includes any invention that is 
                                               
304 INPI online information. Viewed at: ht tp://www.inpi.gov.br/inpi/conheca_inpi.htm. WT/TPR/S/283 • Brazil 
 
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  new and involves an inventive step, and is capable of industrial application. Brazil maintains an 
archive of international patents ( Banco de Patentes do INPI ), which contains complete technical 
descriptions and is open for consultation. 
3.270.  All patent applications are filed in one of INPI’s offices in Brazil or by postal service. When 
the "e-patentes" system (see below) is fully functional, it will also be possible to file patent 
applications online. The first phase is the formal  analysis, when the INPI has 60 days to examine 
whether the application includes all the required documents. If necessary, the INPI may demand 
that the applicant comply with the formal requirements within 30 days. After this initial step, the 
application is kept confidential until 18 months fr om the date of deposit or the date of priority, 
when it is published in the Industrial Property Gazette  (Revista da Propriedade Industrial ). The 
application may be published earlier if the applicant so chooses. In the 24th month from the 
deposit of the application, the applicant must start paying an annual fee. 
3.271.  Technical examination of the patent criteria  must be requested by the applicant or by an 
interested third party no earlier than 60 days after the application is published and within 
36 months from the date of deposit or the date of  priority, failing which the process stops. Within 
60 days after a technical examination request, interested parties may present an opposition to the grant of the patent. Under INPI Resolution No . 191/08, priority for the examination of an 
application may be requested in certain cases (see below). The examiner may issue further 
requirements, which must be addressed within 90 days. After the search is accomplished and 
examination report prepared, the examiner issues the decision regarding the patentability of the 
application under Brazilian Law. The patent is granted and the letters patent is issued after the 
application is considered patentable and the applicant pays the required taxes. The patent is 
considered granted on the day of publication of the act in the INPI Gazette . The "e-patentes" 
system allows the publication of the technical examination and the letters patent issued on the 
INPI website. 
3.272.  Decisions by the INPI may be challenged by the applicant or by a third party through 
administrative or judicial procedures. The applicant must initiate administrative procedures within 
60 days of publication of the decision by the examiner; procedures that are initiated ex officio  or 
by interested third parties, must start within si x months after the grant of the patent. Judicial 
procedures for nullification may be initiated ex officio  or by interested third parties any time. 
3.273.  The time needed by the INPI to analyse patent applications depends on the field of 
technology. In 2012, the average pendency time for patents was five years. In order to reduce the 
backlog and cut pendency time, the INPI is implementing a series of actions specific to patents. In this respect, at the end of 2010, the INPI launched the "Training Programme of Patent Examiners". 
The authorities indicated that, during the training, new examiners carry out the technical 
examination of applications filed at the INPI, under the supervision of experienced examiners.  
3.274.  In the context of this Review, the authorit ies noted that all the procedures, standards, and 
guidelines related to the technical examination of patent applications are currently being updated 
by the INPI. The INPI is also revising other procedures in order to standardize managerial methods of patent examiners. 
3.275.  Applications were not yet fully processed electronically as of March 2013, but the INPI has 
developed a system of electronic processing of pa tent applications denominated "e-Patentes", with 
the purpose of optimizing and modernizing the enti re flow of a patent application, including the 
issuance of letters patent. Also, a system for the electronic filing of patent applications became 
operational in March 2013.  As of March 2011, the "e-patentes" system allows online access to the 
opinion issued by the technical divisions as well as to a granted letters patent, simultaneously with its publication in the Industrial Property Gazette . The INPI has also developed a number of 
management systems, including: the Integrated In dustrial Property System (SINPI), developed for 
the administrative management of applications; the SISCAP, an electronic system for managing the workflow of the examination process, through wh ich it is possible to verify the productivity of 
examiners; the Administrative SISCAP, an electronic system for monitoring administrative 
procedures, which automates administrative tasks and monitors the workflow. To speed up the 
classification process of patent applications, the INPI has put in place automated systems, including systems for the pre-classification of patent applications, their reclassification 
(IPCReclass) to meet the frequent adaptations of  the International Patent Classification (IPC) 
system, and their translation (IPC Translate). WT/TPR/S/283 • Brazil 
 
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  3.276.  Other improvements introduced by the INPI  to enhance the transparency of the process, 
include the establishment of an electronic plat form for publishing, on the internet, technical 
opinions issued by patent examiners regarding the patentability of an application, as well as its search report (e-parecer); the creation of an elec tronic platform providing online access to letters 
patents (e-carta-patente); devising an electronic platform for the deposit and technical 
examination of applications containing biological  sequences (SISBIOLIST); and the introduction of 
a system for automatic retrieval of data from PCT/WIPO and storage in the INPI’s internal system 
(e-Patentes – PCT). 
3.277.  In April 2012, the INPI started the Pilot Programme of Priority Examination of "Green 
Patents", which fast-tracks patent applications filed in Brazil via the Paris Convention for the Protection of Industrial Property, with an applic ation date from 2 January 2011, by residents or 
non-residents. The number of applications is limited to 500, based on a first-requests-considered-
apt criterion determined after an analysis by a Technical Commission. The Programme was scheduled to last one year but was extended. Th e programme of fast-tracks patent applications 
related to: (i) alternative energy; (ii) transpor t; (iii) preservation of energy; (iv) waste 
management; and (v) agriculture. 
3.278.  Other fast-track actions include the introd uction of a "Preliminary Opinion on Patentability" 
service, through which the INPI provides an inform ative report, issued by a patent examiner, with 
an opinion on the patentability of a patent application, giving the applicant a more expedited search and preliminary opinion compared with a regular application. This service is available for any patent application where the INPI is the office of first filing. Also, INPI Resolution 
No. 191/2008 provides for the request of priority of examination of patent applications: (a) when 
the applicant is aged 60 or over, the subject matter of the application is used or made by 
unauthorized third parties, or the grant of the pa tent is a requirement for obtaining funds from 
official credit institutions; and (b) the application is made by third parties who are being accused 
by the applicant of using or making the subject matter of the patent application without authorization. In addition, patent applications with subject matter declared by the Executive 
B r a n c h  t o  b e  o f  p u b l i c  i n t e r e s t  o r  o f  n a t i o n a l  e m e r g e n c y  h a v e  p r i o r i t y ,  a s  w e l l  a s  a p p l i c a t i o n s  
considered by the Ministry of Health to include subject matter of medicines purchased regularly by the Unified Health System. 
3.279.  The number of patents granted annually has increased significantly since 2007, when 
1,855 patents were granted. More than double that number of patents were granted in 2011 
(Table 3.26).  
Table 3.26 Patents applications and decisions, 2005-14 
Year Applications Final decisions Letters patents Examiners 
2005 24,096 10,759 2,833 122 
2006 25,406 10,491 2,785 201 
2007 24,685 15,634 1,855 189 
2008 27,050 15,870 2,824 182 
2009 25,951 16,012 3,153 295 
2010 28,058 20,040 3,620 287 
2011 31,897 29,540 3,806 270 
2012 (projected) 35,000 32,000 4,500 365 
2013 (projected) 42,000 40,000 7,500 500 
2014 (projected) 50,000 50,000 10,000 700 
Source: INPI. 
3.280.  According to available data, less than 2.5% of the INPI’s decisions on patent applications 
are challenged in courts. The rate of success of th e challenged decisions is of 1.5% of all patent 
applications. 
3.281.  Parallel imports of goods embodying IPRs covered by the Industrial Property Law are not 
allowed. Where the characteristics of a good are alte red in such a way as to jeopardize or to make 
impossible its identification, it may be seized ex officio  by customs authorities, both in case of 
importation or exportation. The holder of an intellectual property right of any type may request a WT/TPR/S/283 • Brazil 
 
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  judicial order for the suspension by the customs authorities of the release of goods into free 
circulation. 
3.282.  Chapter 7, title I of Law No. 9,279 of 14 May 1996 provides for the granting of compulsory 
licences. In the case of patents, compulsory licences may be granted for reasons of national 
emergencies, to meet the public interest, in cases of abuse of rights or of economic power, for 
non-commercial use in Brazil, and for failure to meet the needs of the market. Decrees Nos. 4,830 
of 4 September 2003 and 3,201 of 26 October 1999 re gulate the granting of compulsory licences 
in cases of national emergency and public interest. If a compulsory licence is granted in the public 
interest, it must be for non-commercial public use.305 No compulsory licences have been granted 
since 2007, when the Brazilian Government granted a compulsory licence for the relevant Efavirenz’s patents, a life-saving medicine for AI DS patients. These licences were determined by 
Decree No. 6,108 of 4 May 2007 and relate to patents PI 1100250-6 and PI 96088839-7. Decree 
No. 7,723 of 4 May 2012 further extended Efavirenz’s patent compulsory licensing for public non-economic purposes. The compulsory licence was extended for another five years, up to the expiry 
of the patents. 
3.283.  Compulsory licensing of patents may also be used as a remedy for anti-competitive 
conduct, as determined by the CADE. The Brazilian Antitrust Law No. 12,529 of 
30 November 2011 improved the treatment of intellectual property in competition issues through a 
provision indicating that to exercise or to exploit abusively industrial property, intellectual property, and technology or trademark rights cons titutes a violation of the economic order. The 
previous law, No. 8,884/1994, contained looser language indicating only that "to take possession 
of or bar the use of industrial or intellectual property rights or technology" would be deemed a 
violation of the economic order. Similarly to th e previous law, Law No. 12,529/2011 lists sanctions 
that may include a recommendation to the competent public authorities to grant a compulsory 
licence for the intellectual property right held by the infringer, when the infringement is related to 
the use of this right. Another innovation introduced by the new Antritrust Law is an explicit provision including compulsory licensing of IPRs as one of the conditions for approval of a merger 
that may be ruled by the CADE’s plenary tribunal. 
3.284.  In the context of this Review, the author ities indicated that, to date, the CADE has not 
ruled for the compulsory licensing of intellectual property rights. However, one merger case during the review period involved licensing that associated dominance in relevant medicine markets to 
patent rights. Although the CADE did not set a compulsory licence condition for the merger, the 
case resulted in an agreement to implement a voluntary medicine patent licence celebrated ("Termo de Compromisso de Desempenho " - TCD, a legal concept present in Law 
No. 8,884/1994). The case involved the global acquisition of all Schering-Plough shares by Merck 
(Case AC No. 08012.002252/2009-92); it started in March 2009 and was concluded in October 2010. 
3.285.  In October 2010, the CADE approved the oper ation, conditioning it to the celebration of a 
TCD, to guarantee the presence of at least one competitor in the production/sale of products 
belonging to Merck’s therapeutical subdivisions C10A9 and C10C0 categories in the Brazilian 
market. According to the TCD, the merging parties have to require, simultaneously, a register at 
ANVISA, in order to convert their previous distribution relation into a product licensing relation, in 
which third parties will be able to, as soon as they have proper registers and authorizations from ANVISA, commercialize the products with their trad emark, package and other characteristics. This 
was the first time a restriction was imposed on patent exploitation in a merger in Brazil. The 
authorities noted that, while the case was essentially about dominance in relevant medicine markets, the decision was not strictly focused on IPRs, since the TCD signed is not on 
pharmaceutical patents licensing, but exclusive distribution contracts for products considered to be 
critical. In this respect, the TCD sets an exclus ive distribution transition period to ensure the 
entrance of a competitor on the market, as it is considered that the patent licensing alone would not necessarily result in the entrance of a new manufacturer in the market.  
3.286.  Under Brazilian law, a patent will be forfeited, ex officio or at the request of any party 
having a legitimate interest, if, after two years si nce the granting of the first compulsory licence, 
                                               
305 INPI online information. Viewed at: http://w ww.inpi.gov.br/legislacao /conteudo/dec4830.htm. WT/TPR/S/283 • Brazil 
 
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  abuse or disuse has not been remedied, unless there are justifiable reasons. Industrial design 
applications are examined only in case of challenges.306  
3.287.  Law No. 10,196 of 16 February 2001 amended Law No. 9,279 of 1996, inter alia , with 
respect to the procedures for the patentability of pharmaceutical products. The grant of patents for 
pharmaceutical products or processes must receive the prior approval of the Brazilian Sanitary 
Surveillance Agency (ANVISA). Ordinance MS/MDIC/AGU No. 1,956/2011 created an Interministerial Working Group formed by representa tives from the Ministry of Health, the Ministry 
of Development, Industry and Foreign Trade, the Office of the Attorney-General of the Union, 
ANVISA, and the INPI. The task of the workin g group was to analyse and suggest criteria, 
mechanisms, procedures, and obligations in order to coordinate the works of ANVISA and INPI in order to comply with Article 229-C of Law No. 9,279/1996. The final report, in Interministerial 
Ordinance No. 1,065/2012, confirms the need for AN VISA to undertake an analysis prior to the 
one carried out by the INPI, to evaluate the impact of the pharmaceutical product or process on public health. The report confirmed the process for the evaluation of patent applications for 
pharmaceutical products: (i) ANVISA carries out the technical examination of patent applications 
related to pharmaceutical products or processes received from the INPI; (ii) ANVISA publishes its decision regarding its prior consent; and (iii) submits it to the INPI. The INPI’s role consists in: 
(i) formal examination of the documents received from the patent applicant; (ii) identification and 
remittance to ANVISA of applications related to pharmaceutical products or processes; (iii) technical examination of applications that receive ANVISA prior consent; and (iv) publication of the final decision regarding the patent application.  
3.288.  Industrial designs are protected under th e Industrial Property Law, Resolution No. 076 
of 2000, and Normative Act No. 161 of 2002. The term of protections is ten years from the date of 
filing, which may be extended for three successive fi ve-year periods. Industrial design applications 
are subject to a formal preliminary examination and, if in order, are officially recorded; otherwise, 
the INPI may formulate demands to be complied with within five days. In both cases, the filing date is considered to be the date the application was first submitted. Applications must refer to a 
single object, with up to 20 variations, provided that such variations are intended for the same 
purpose and have the same main distinguishing characteristic. Once the application is filed and all the formal requirements are met, the INPI automa tically publishes it and simultaneously grants 
the registration. Applicants may request, at the time of filing, that the application is kept secret for 
180 days, after which it is processed. There is no compulsory licensing of industrial designs.
307 
Industrial design registrations increased from 5,335 in 2007 to 6,791 in 2011. 
3.289.  Trademark registrations increased substantially between 2003 and 2007, from 20,193 
to 75,710.308 Brazil adheres to the Convention on the Protection of New Varieties of Plants 
(UPOV).309 A protected plant variety may be the object of a compulsory licence. The INPI has a 
division that covers the protection of geographic al indications and has already approved protection 
for some geographical indications, such as French Cognac, Champagne and  região dos vinhos 
verdes  (green wine) of Portugal.310 
3.4.5.2.3  Trademarks 
3.290.  The Brazilian trademark protection syst em is based on the Industry Property Law, 
Resolutions No. 121 of 2005, No. 260 of 2010, Normative Acts Nos. 110 and 111 of 1999, the 
Paris Convention, and the TRIPS Agreement. Protection is for 10 years renewable for equal successive periods. The protection of trademarks  in the Brazilian system grants the right or 
priority (six months) and the protection to well-known trademarks. Brazilian law also offers 
protection for collective trademarks and famous trademarks. Any visually perceptive distinctive sign, when not prohibited under law, may be regist ered as a mark. Private legal entities may only 
request registration of a mark relating to the ac tivity that they effectively and licitly exercise 
directly or through undertakings that they control directly or indirectly. The application for registration and any documents attached must be presented in Portuguese and, whenever there is 
a document in a foreign language, a simple translation must be presented at the time of filing the 
                                               
306 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP /Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. 
307 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP /Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. 
308 INPI online information at: http://www.inpi.gov.br/menu-esquerdo/instituto/estatisticas. 
309 WTO document IP/C/M/25, 22 December 1999. 
310 WTO document IP/Q/BRA/1, IP/Q2/BRA/1, IP /Q3/BRA/1, IP/Q4/BRA/1, 24 February 2004. WT/TPR/S/283 • Brazil 
 
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  application or within 60 days. A foreign applicant must maintain a qualified attorney, resident in 
Brazil, with authority to represent the applicant administratively and judicially.  
3.291.  There are absolute and relative grounds fo r refusals of registrations. Both are examined ex 
officio . Based on absolute grounds, the INPI does not grant registration to trademarks that: do not 
consist of signs graphically represented; are devoid of any distinctive character; contain or consist 
of a false or true designation of origin or a geographical indication; are contrary to accepted principles of morality or against the freedom of religion or conscience; contain official symbols, 
such as national flags and monuments; are of such a nature as to deceive the public, for instance, 
as to the nature, quality or geographical origin of the good or service; are signs or expression 
used only as a means of advertising; are not related to the activity performed directly or indirectly by the applicant. Based on relative grounds, the INPI does not grant registration to trademarks 
that:  contain or imitate any previous rights or trademarks of a third part; are identical 
trademarks, even in cases where both are related to the same owner; are usual, common or ordinary shapes of the product or its packaging, or shapes that cannot be separated from a 
technical effect. 
3.292.  The number of trademark applications increased during the period under review, reaching 
149,612 in 2012, of which 74% were filed electronically (Table 3.27), while the number of 
registrations remained relatively flat after 2007. Over 2007-May 2012, the ratio of filings to 
registrations was slightly above two to one.  
Table 3.27 Trademark applicat ions registrations, 2007-12  
Year 2007 2008  2009  2010  2011 2012  
e-filing 48,716 67,125  76,625  91,173  111,284 110,681  
Paper 56,889 57,375  38,927  38,580  41,647 38,931  
Total 106,605 124,500  115,552  129,753  152,931 149,612  
% of e-filing 46% 54% 66% 70% 73% 74% 
Registrations 128,540 60,286  64,182  64,529  60,504 55,306  
Source: INPI. 
3.4.5.2.4  Other forms of  industrial property 
3.4.5.2.4.1  Geographical indications 
3.293.  Geographical indications (GIs) are protected in Brazil in accordance with the TRIPS 
Agreement, through Industrial Property Law No. 9,279 of 14 May 1996. As of July 2012, 
30 were GIs protected in Brazil, including national and foreign indications. A GI registration 
application must be accompanied by: instruments proving the legitimacy of  the applicant; norms 
regulating of use of the GI by holders; official documents delimiting the geographical area; the description and characteristics of the product or se rvice; and proof of existence of a structure for 
controlling the standards of production by authorized producers.  
3.294.  After the application is filed, the INPI proceeds to a formal examination of the documents. 
If they are in order, the INPI publishes the application in the Official Gazette ; otherwise, the 
applicants have 60 days to comply with th e requirement(s) made by the INPI. Following 
publication of the application, third parties have 60 days to file opposition, and the applicants have 
60 days to respond. The INPI issues a decision re garding the application. If granted, applicants 
have 60 days to pay the required fee; in case of rejection, they have the same time period to 
appeal. The final decision is issued by the President of the INPI. 
3.4.5.2.4.2  Layout of  integrated circuits 
3.295.  Law No. 11,484 of 31 May 2007 protects layouts of integrated circuits for ten years from 
application. The law defines the topography of an integrated circuit as a series of related images, 
constructed or encoded in any form or medium, representing a three-dimensional configuration of 
the layers comprising an integrated circuit, in which each image represents, in whole or in part, the geometric or surface arrangements of the integrated circuit in any stage of its design or 
manufacturing. Protection is granted only to topographies that are original, result from the WT/TPR/S/283 • Brazil 
 
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  intellectual efforts of the creator(s), and are not common or usual for technicians, experts or 
integrated circuits manufacturers. 
3.296.  All applications are filed with and anal ysed by the INPI. They must contain: (i) the 
description of the topography an d its function; (ii) drawings or  photographs of the integrated 
circuit; (iii) a declaration of previous exploitation, if needed; (iv) a receipt of payment of the filing 
fee. Once the application is filed and all the formal requirements are complied with, the INPI automatically publishes it and simultaneously grants the registration. Applicants may request, at 
the time of filing, that the application is kept secret for a period of six months, after which it is 
processed. There were 12 applications at the INPI  for protection of topographies of integrated 
circuits during the 2007-11 period. 
3.4.5.2.4.3  Plant varieties 
3.297.  Plant Variety Protection Law No. 9,456 of 25 April 1997 protects new plant varieties and 
derived plant varieties of any genus or species. The law guarantees the property right to any natural or legal person obtaining a new plant variety or essentially derived variety. The term of 
protection is 15 years from the grant of a certificate except for vines, fruit trees, forest trees, and 
ornamental trees, including the mother graft th ereof, for which the term is 18 years. Plant 
varieties may be subject to compulsory licences for three-year periods, renewable. 
3.4.5.2.4.4  Undisclosed information 
3.298.  Law No. 10, 603 of 17 December 2002 regulates undisclosed information related to 
pharmaceutical products for veterinary use, fert ilizers, pesticides, their components, and related 
products. The law grants protection against the unfair commercial use, information and data 
presented to the authorities for commercial appr oval; the term of protection is ten years for 
products that use new chemical or biological entities, five years for all others. Compulsory use of protected information is possible in specific cases, such as public interest or anti-competitive 
behaviour. Furthermore, undisclosed information in general is protected by Article 195 of the 
Industrial Property Law, which specifies crimes of unfair competition, including the use of undisclosed information without authorization or by breach of contract.  
3.4.5.3  Copyright 
3.299.  Copyright issues in Brazil are regulated by Law No. 9,610 of 19 February 1998 (Copyright 
Law), and Law No. 10,695 of July 2003. Law No. 10,695/2003 amended the Criminal Code to include stiffer sanctions for copyright violations and to improve criminal procedures. In the context 
of this Review, the authorities noted that a dr aft bill updating and amending Law No. 9,610/1998 
is currently under analysis at the Department of Intellectual Property in the Ministry of Culture before being forwarded to Congress.  
3.300.  Copyright protection is granted for texts of  literary, scientific or artistic works, musical 
compositions, audiovisual works, drawings, painting s, and photographic works. No registration is 
necessary. The general term of protection is the life of the author plus 70 years.  
3.301.  In accordance with the Berne Conventi on, the TRIPS Agreement, and Law No. 9,610/1998, 
the protection granted to copyrighted works is in dependent of registration. However, right holders 
may register their works at accredited institutions, such as the Brazilian National Library; the School of Music or the School of Fine Arts of the Federal University of Rio de Janeiro; the Federal 
Council of Engineering, Architecture and Agronomy, or the INPI.
311 This registration provides a 
presumption of authorship which may be helpful, for instance, in judicial procedures; therefore, it is a declaratory registration and does not constitute any right. 
3.302.  Brazil has several associations for the collective management of copyright: the Central 
Office for Collection  and Distribution; Associação Brasileira de Música e Artes; Associação de 
Músicos; Arranjadores e Regentes; Associação de Intérpretes e Músicos, Sociedade Brasileira de 
Autores, Compositores e Escritores de Música; Sociedade Independente de Compositores e 
                                               
311 For the complete list of accredited institutio ns, see: http://www.cultura.gov.br/site/2008/03/ 
08/orgaos-de-registro-de-obras-intelectuais/. WT/TPR/S/283 • Brazil 
 
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  Autores Musicais, the Sociedade Brasileira de Administração e Proteção de Direitos Intelectuais; 
União Brasileira de Compositores; Associação Bras ileira de Autores, Compositores, Intérpretes e 
Músicos; Sociedade Administradora de Direitos de Execução Musical do Brasil; Associação Brasileira de Direitos de Autores Visuais; an d Associação Defensora de Direitos Autorais .  
3.303.  The Copyright Law does not contain provisions with respect to the international exhaustion 
of rights; decisions are taken on a case-by-case  basis. In the context of this Review, the 
authorities noted that jurisprudence on the subjec t is not presently available, since there is no 
final decision by higher courts on the issue. Brazilian law grants copyright holders the right initiate 
procedures for the prosecution of importers of pirated goods. Decree No. 6,759/2009 provides the legal framework for border measures on goods suspected of piracy.  
3.4.5.4  Enforcement 
3.304.  Brazil responded the questions in the Checklist of Issues on Enforcement
 with respect 
to IPRs in 2000.312 Articles 183 to 210 of the Industrial Property Law establish civil and criminal 
offences and procedures for violation of patents, trademarks, industrial designs, geographical 
indications, and unfair competition. The Brazilian au thorities' approach to the issue of enforcement 
of IPRs is to seek to strengthen the institutional image, raise public awareness regarding the harm of illegal goods, and improve the Brazilian  legal framework regarding IPR violations. 
3.305.  Only State Courts have jurisdiction over criminal acts of infringement of intellectual 
property rights. Criminal procedures and penalties are available for infringements related to all categories of intellectual property rights, except plant varieties protection. For patent law violations that constitute criminal offences, penalties of imprisonment generally vary from three 
months to a year, but may be increased according to the infringement and the infringer. In the 
case of copyright, articles 101 to 111 of the Copy right Law establish acts considered civil offences, 
while crimes are described in the Criminal Code. Penalties vary from three months to four years of 
imprisonment and/or a fine. Infringement of software copyright is a civil and criminal offence, 
punishable with detention from six months to four years, plus a fine depending on the infringement, and possible seizure of the copies produced or commercialized in violation of 
copyright. Law No. 10,695/2003 reinforced Brazil's enforcement regime by increasing the types of 
copyright infringement considered as felonies, setting harsher penalties, introducing more stringent provisions with respect to the media through which counterfeit material can be distributed, and reinforcing the power of judges to order, at the request of the affected party, the 
destruction of the production or reproduction seized in certain circumstances. 
3.306.  Enforcement efforts have been stepped up through the establishment of a National Council 
to Combat Piracy and Other Crimes Against Intellectual Property Rights, which gathers together 
representatives from the Government and the civil society. The Council's main goal is to elaborate 
and monitor the implementation of the National Plan to Combat Piracy and Other Crimes Against Intellectual Property Rights, which includes a number of actions to fight IPR violations, such as 
repressive activities, as well as educational and economic activities.  
3.307.  During 2008-12, the National Council implem ented 23 strategic projects to fight piracy and 
other IPR violations, of which six were given priority: City Free of Piracy; Course for Public Agents; Legal Fair; Commerce Against Piracy; Internet Gateway of the Combat Against Piracy; and 
Partnerships and Cooperation with Internet Servic e Providers. The authorities noted that, besides 
the strategic projects, the Council intends to strengthen its activities by: further developing partnerships with the private sector and other governmental agencies; structuring internal 
processes related to financial management, human resources, and communication; structuring 
mechanisms for the search and exchange of information; further developing educational campaigns and institutional marketing; mobilizing and articulating governmental agencies for 
enforcement; developing innovative solutions to hamper the commercialization of illegal goods; 
and formulating and managing the policies to combat IPR violations.  
3.308.  In 2011, the Federal Police Department initiated 8,325 investigations on the smuggling of 
goods, with 4,130 indictments. As regards piracy, the Department undertook 555 investigations 
with the same number of indictments. The Federal Police also launched 195 operations to combat 
IPR violations in 2009, and 186 operations in 2010. Enforcement actions were also undertaken by 
                                               
312 WTO document IP/N/6/BRA/1, 24 March 2000. WT/TPR/S/283 • Brazil 
 
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  the Federal Highway Police Department, which, between 2008 and 2010, apprehended 
360,137 litres of illegal beverages, 22.2 million CD/DVD units, 7.85 million packets of cigarettes, 289,969 computers, 1.05 million units of other electronic equipment, and 21.88 million units of medicines. The Department also made 5,116 arrests related to such crimes.  
3.309.  The Secretariat of the Federal Revenue of Brazil seized, R$1.275 billion (over 
US$600 million) in goods or in financial assets in  2010. The goods with the highest gross share of 
seizure were electronics, cigarettes, sunglasses, and clothing. In 2010, more than 3,500 tons of 
goods, totalling R$353.66 million (o ver US$175 million) were destroyed.  
3.310.  Articles 605 to 610 of Decree No. 6,759/2009 set out the border measures available to 
right holders for the enforcement of copyrights and trademark rights. The Federal Customs Service 
is in charge of inspecting and seizing shipments at the national border. The use of border 
measures must generally be requested by the righ ts holder, who must provide adequate evidence 
to satisfy the customs authorities. However, in case s of counterfeiting of the arms, coat of arms or 
national official badges of any country, the Customs Service has the authority to initiate 
representation for criminal purposes in order to apply the provisions of Article 191 of Law 
No. 9,279/1996. The Customs Service retains the su spected goods and notifies the rights holder 
for the initiation of judicial procedures, if th e right holder deems it appropriate. The Customs 
Service may request that the rights holder prov ides a guarantee in an amount sufficient to 
safeguard the alleged infringer and avoid abuses. If procedures are not initiated within ten days of the retention, the Customs Service releases the goods. 
3.311.  The procedures available for the destruction or other disposal of infringing goods and 
materials/implements for their production are provided by Decree-Law No. 3,689/1941 as 
amended by Law No. 10,965/2003, related to the Code of Criminal Procedure. WT/TPR/S/283 • Brazil 
 
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  4  TRADE POLICIES BY SECTOR 
4.1  Introduction 4.1.  Brazil has a dynamic agriculture sector that plays an important role in its economy. Although 
it provides a relatively low level of support to its agricultural producers compared with other 
countries, Brazil maintains several domestic support measures, including preferential credit lines 
and price support mechanisms. During the review period, new programmes were created to finance farmers. Disbursements with official rural credit continued to rise, along with the 
expansion of key support programmes such as PRONAF. Brazil maintains a policy of mandatory 
bank reserve requirements to be allocated to finance agricultural activities. During the period under review, the required rate of mandatory resources was increased twice, bringing it to 34% of demand deposits from 25% prior to November 2008.  
4.2.  Brazil has a highly diversified manufacturing  sector. During the review years, however, the 
sector lost some dynamism due an erosion of competiveness, which translated into rising imports and slow-growing exports. In response, the Govern ment has strengthened the importance given to 
industrial policy, partly through two comprehensive nationwide plans, the Productive Development 
Policy (2008-10) and the Plano Brasil Maior  (2011-14). Instruments used to promote the 
manufacturing sector under these plans include credit lines under favourable conditions, public 
procurement, fiscal incentives, and border measures. 
4.3.  Brazil is nearly self-sufficient in primary energy production; although Brazil's energy matrix 
remains one of the greenest in the world, the participation of renewable sources in total energy production decreased during the review period. On  the other hand, petroleum production in Brazil 
has been expanding steadily: total output reached 768 million barrels in 2011, a 20.5% increase 
from 2007. Notwithstanding the growing domestic demand, Brazil became a net exporter of crude oil for the first time in 2007 and has significan tly expanded its oil trade surplus since then. 
In 2011, the volume of exports was 1.68 times that of imports. Nevertheless, Brazil's dependency 
on imports of refined petroleum products has increased due to insufficient refining capacity. Brazil relies on substantial imports of natural gas, although domestic production increased by 41% 
between 2007 and 2012. PETROBRAS has maintained  its dominant position in the production, 
refining, distribution, and retailing of petroleu m and petroleum products in Brazil. In 2011, the 
state-controlled company accounted for some 90% of the country's total oil production. PETROBRAS also owns 98% of Brazil's total refining capacity. 
4.4.  During the review period, Brazil retained its position as the world's second-largest producer 
of ethanol. In April 2010, Brazil reduced its import tariff on ethanol from 20% to 0% to promote consumption and prevent price increases. It has also sought to foster production: in 2012, the 
federal development bank BNDES launched two ne w programmes offering credit at attractive 
conditions to the ethanol sector. Since 2011, the BNDES also finances innovation in sugar-cane biomass technology. 
4.5.  The regulatory framework for the electric ity sector was revamped in early 2013, with the 
passage of a new law, which now regulates the concession of generation, transmission, and distribution of electricity. The new law extended the regime of concessions for electricity generation and the system of quotas, only once, for a period of up to 30 years. The extension is 
contingent upon the generator's acceptance of certain conditions, to be set by the regulator 
ANEEL, including the remuneration tariffs to be applied, a guaranteed supply quota allocation, and quality standards. Quotas will be allocated th rough contracts and are expected to be revised 
periodically by ANEEL.  
4.6.  During the period under review, the authorities continued to display efforts to increase the 
degree of financial intermediation and lower interest rate spreads. The Government has promoted 
financial inclusion by, inter alia , improving distribution channels, increasing transparency, and 
adapting the regulation of financial services for low income customers. This has increased the degree of financial intermediation: the credit to GDP ratio rose from 25% in 2003 to more than 50% in 2012. This has been a step in the right direction to correct the insufficient supply of 
medium and long-term private credit for small and medium-size enterprises, identified in the last 
TPR of Brazil. However, the role of state banks in medium- and long-term financing remains very important, directly or through equalization initiatives, by which a portion of the interest rate WT/TPR/S/283 • Brazil 
 
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  charged to credit users is taken up by the State. The decline in interest rate spreads has played an 
important role in increasing financial deepening. The average interest rate spread, considering the credit portfolio as a whole, dropped by almost 10 percentage points during the review period. 
However, while average interest rate spreads were reduced, they remain wide at over 
24 percentage points in 2012. The establishment of new foreign financial institutions requires 
approval by Presidential Decree. In practice, the establishment of new foreign financial institutions has been allowed, and 17% of assets are in the hands of foreign banks. 
4.7.  Recent changes to the telecommunications legislation have allowed telecommunication 
operators more flexibility to offer converged servic es in line with the international trend and the 
development of new technologies. Brazil's operat ors have already made he adway in Latin America 
in terms of deploying triple-play offerings (voice, broadband, and television) and some have plans 
to offer quadruple-play multi-service packs (adding mobile telephony to the above). This trend has 
led to further consolidation of Brazil's major telecom groups. 
4.2  Agriculture, Forestry, and Fisheries 
4.2.1  General features 
4.8.  Endowed with the fourth-largest agricultural area in the world, Brazil has a dynamic 
agriculture sector that plays an important role in its economy.
1 The share of agriculture in GDP is 
relatively modest, at 4-5% in 2012 (Table 1.1). However, its share of employment is much more 
important: in 2011, agriculture (including fisheries and forestry but excluding processed products) employed 15.7% of the country's workforce. Also, there is substantial value added in agriculture-
related activities, and the entire agribusiness chain (including agricultural inputs, as well as 
processing and distribution activities) contributed 22% of GDP in 2011.
2  
4.9.  During the review period, the agribusiness sector had a crucial role in sustaining Brazil's 
trade surplus (Charts 1.1 and 1.2). In 2012, the se ctor's trade balance reached an all-time high, 
with agri-food products accounting for 39.5% of total exports and only 7.4% of imports 
(Table 4.1), and countered the trade balance deterioration in other sectors. In 2009, the global economic crisis led to a reduced demand (in value terms) for Brazilian agri-food exports, which fell 
after almost a decade of uninterrupted growth. Nevertheless, exports have recovered substantially 
since 2010, reaching a record US$95.8 billion in 2012, up from US$58.4 billion in 2007. 
Table 4.1 Brazil's agribusiness trade balance, 2007-12  
(US$ billion) 
Years 2007  2008  2009  2010 2011 2012  
Agribusiness exports 58,420  71,806  64,786  76,442 94,968 95,814  
Agribusiness imports 8,719  11,820  9,900  13,391 17,497 16,406  
Agribusiness trade balance 49,701  59,987  54,886  63,051 77,471 79,408  
Total trade balance 40,032  24,836  25,290  20,147 29,794 19,431  
Note: The agribusiness numbers do not include import s of capital goods by agricultural companies.  
Source: MAPA online information. Viewed at: http://www.ag ricultura.gov.br/interna cional/ indicadores-e- 
estatisticas/balanca-comercial. 
4.10.  Brazil is a major player in global agricultur al trade, accounting for 7.3% of total agricultural 
exports.3 It is the world's third-largest exporter of agricultural products, only behind the EU and 
the United States.4 In 2010, Brazil was the world's leading ex porter of sugar, coffee, orange juice, 
beef, and poultry.5 Brazil's main agricultural exports increased significantly over 2007-12 
(Chart 4.1). Soybean products remain the largest export, followed by sugarcane products (sugar 
and ethanol), meat (especially poultry and beef), coffee and cereals. Together, these commodities 
accounted for 31.8% of total Brazilian exports in 2012.  
                                               
1 OECD (2011). 
2 University of São Paulo – CEPEA online informat ion. Viewed at: http://www.cepea.esalq.usp.br/pib/ 
3 MAPA (2011). 
4 USDA online information. Viewed at: http ://www.fas.usda.gov/coun try/Brazil/Brazil.asp/. 
5 MAPA online information. View ed at: http://www.agricultura.gov.br/arq_editor/file/Sala%20de%20 
Imprensa/Publica%C3%A7%C3%B5es/gr aficos_portugues _corrigido2.pdf. WT/TPR/S/283 • Brazil 
 
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  Chart 4.1 Main agricultural exports, 2007-12 
(US$ million) 
02,0004,0006,0008,00010,00012,00014,00016,00018,00020,000
Soybean and soybean
productsSugarcane products Meat Coffee Maize2007 2012
 
Source: MAPA online information. Viewed at: http://www.agri.gov.br. 
4.11.  In 2011, the main destinations for Brazilian  agri-food exports were the EU (25.1%), China 
(17.5%), the United States (7.1%), Russia (4.3%), and Japan (3.7%). The importance of China as 
a trading partner for Brazilian agribusiness increased substantially during the review period. 
In 2007, China purchased 8% of Brazilian agri -food exports, which corresponded to some 
US$4.7 billion; this amount more than tripled to U$16.5 billion in 2011.6  
4.12.  Imports of agri-food products increa sed substantially between 2007 and 2012, from 
US$8.7 billion to US$16.4 billion. Wheat remains the single most important import commodity, accounting for over one third of total agri-food imports. Other major imports include: paper, 
rubber, dairy products, palm oil, malt, olive oil, and rice.
7 Brazil also continues to depend on 
substantial imports of agricultural inputs, in particular fertilizers.  
4.13.  The general institutional framework for the agriculture sector remains unchanged from the 
previous review period. Brazil has two ministries in  charge of agricultural policies: the Ministry of 
Agriculture, Livestock and Food Supply (MAPA), and the Ministry of Agrarian Development (MDA). 
The Secretariat of Agribusiness International Relations in the MAPA (SRI/MAPA) is responsible for foreign trade issues and notifications to the WTO. The MDA is in charge of land reform and family 
farm policies, including the Programme to Strengthen Household Agriculture (PRONAF). The 
National Food Supply Company (CONAB), a stat e trading company linked to the MAPA, is 
responsible for administering a number of agricultur al policies, including those related to strategic 
storage and minimum price guarantees (Chapter 3.4.3). 
4.2.2  Border measures 4.14.  The average tariff for agricultural products (ISIC definition) was 7.2% in 2012, considerably 
below the 11.70% average MFN tariff. Using the WTO definition of agriculture, the average MFN 
tariff was 10.1%. Tariffs higher than the average apply to: dairy products (18.6%), sugar and 
confectionary (16.7%), beverages, spirits, and tobacco (16.5%), and coffee and tea (13.7%), 
                                               
6 FIESP online information. Viewed at: http ://www.fiesp.com.br/agronegocio/default.aspx. 
7 MAPA online information. View ed at: http://www.agricultura.gov .br/internacional/indicadores-e-
estatisticas/balanca-comercial. WT/TPR/S/283 • Brazil 
 
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  while imports of cotton (7.4%) oil seeds, fats an d oils and their products (7.8%), and animals and 
animal products (7.9%), are subject to tariffs lower than the average. 
4.15.  Brazilian imports of agricultural products may benefit from preferential tariff quotas in 
accordance with MERCOSUR's rules on temporar y measures regarding supply shortages. Under 
these rules, imports of cotton and jute were subjec t to a reduced in-quota tariff of zero and palm 
kernel to an in-quota tariff of 2%. Mexican exports of garlic to Brazil also benefited from a 0% in-quota tariff in 2011 established under Economic Complementation Agreement No. 53 between the 
two countries.
8  
4.2.3  Domestic support measures 4.2.3.1  General features 4.16.  Brazil provides a relatively low level of support to its agricultural producers compared with 
OECD countries (see below). However, it maintains several domestic support measures, including 
subsidized credit lines and price support mechanis ms (Table 4.2). During the review period, new 
programmes were created to finance farmers, including the Medium-Scale Agricultural Producer 
Support Programme (PRONAMP) and the Low Carbon Agriculture Programme (Programa ABC). 
Disbursements with official rural credit continued to rise, along with the expansion of key support programmes (e.g. PRONAF). Disbursements for pric e support mechanisms increased significantly 
in 2009 to R$3.7 billion, but fell to about R$1.6 billion in 2011. Programmed resources for market 
price support, including AGF and public options, rose from R$4.2 billion in 2009 to R$1.1 billion in 2011. 
Table 4.2 Main agricultural support measures and programmes  
(R$ million and US$) 
Programme Description Amounta 
Official rural credit (total) Agricultural credit lines subject to the official  Rural Credit 
Manual conditions, which include preferential interest rates 
fixed by the Government R$106,405 
(US$50,700) 
Programme to Strengthen 
Household Agriculture (PRONAF) Support for small-scale producers with a gross annual 
income of up to R$160,000 per family R$12,902 
(US$6,144) 
Medium-Scale Agricultural 
Producer Support Programme 
(PRONAMP) Financing of agricultural acti vities for producers with an 
annual gross income of up to R$800,000 R$7,702 
(US$3,668) 
Banco do Brasil Credit Line for 
Agri-Industries (BB-
agroindustrial)  Finances the commercialization and processing of 
agricultural products, as well as the sale and production of 
agricultural inputs R$6,467 
(US$3,080) 
BNDES Programme for the 
Sustainability of Investment in 
Capital Goods (PSI-BK) Finances the acquisition and maintenance of machinery 
and equipment for agricultural production R$6,040 
(US$2,876) 
Policy of Guaranteed Minimum 
Prices (PGPM) Price support mechanisms R$1,595 
(US$759)b 
Low Carbon Agriculture Programme (Programa ABC) Finances agricultural practices aimed at reducing 
greenhouse gas emissions R$1,516 
(US$722) 
a Values refer to harvest year 2011/2012 (July to June).  
b This figure refers to gross expenditures (in calendar year 2011) and does not take into account 
government revenues with the PGPM.  
Source: WTO Secretariat, based on online in formation from MAPA and CONAB. Viewed at: 
http://www.agricultura.gov.br/vegetal/estatisticas, and http://www.conab.gov.br/conteudos.php ?a=1255&t.  
4.17.  In 2009, Brazil notified to the WTO that it  did not grant export subsidies for agricultural 
products in calendar years 2002 to 2007. Brazil also reported that it had provided food aid 
in 2005, 2006, and 2007. Brazilian food aid totalled some 25.9 tonnes in 2007, about half of which was rice.
9 In October 2012, Brazil informed the Committee on Agriculture that export subsidies 
had not been granted for agricultural products during calendar years 2008, 2009, and 2010. Food 
                                               
8 Information provided by the Brazilian authorities. 
9 WTO document G/AG/N/BRA/25, 16 March 2009. WT/TPR/S/283 • Brazil 
 
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  aid to all destinations totalled 47,284 tonnes over the 2008-10 period; in 2009, some 94% was 
rice.10 
4.18.  As at March 2013, Brazil's latest notification on domestic support measures dated from 
March 2012 and covered the 2006-09 period.11 The Aggregate Measure of Support (AMS) notified 
was US$341.8 million for 2006- 07, US$520.4 million for 2007- 08, and US$292.9 million 
for 2008-09. Thus, the AMS remained below Brazil's committed level of U$912.1 million throughout the period covered by the notification. 
4.19.  All of the AMS notified for 2008-09 corresponded to product-specific support targeting 
wheat (28.86% of the value of production). The measures were taken under the Premium for Product Outflow (PEP), a price support instrument, and through government acquisitions. Brazil reported support measures for a number of other products, but these remained below de minimis  
levels. In the same period, Brazil notified expenditures under production credit, investment credit, 
input subsidies, and debt rescheduling schemes  totalling US$134 millio n, US$705 million, US$2 
million, and US$29 million, respectively, as "measures exempt from the reduction commitment, 
special and differential treatment, development programmes". 
4.20.  Disbursements for measures reported under the Green Box totalled R$3.6 billion in 2009; 
domestic food aid (R$1 billion) was the main type of measure under this category, followed by 
extension and advisory services (R$655 million), infrastructural services (R$593 million), and 
agrarian organization (R$503 million). 
4.21.  According to OECD calculations, Brazil's to tal support to agriculture averaged 0.55% of GDP 
in 2008-10, which was lower than the OECD averag e of 0.88%. In addition, the Producer Support 
Equivalent (PSE) averaged 5% in the period, significantly below the OECD countries' average 
of 20%. However, the OECD contends that about two th irds of Brazil's PSE is provided in "the most 
production and trade distorting forms", especially  through price support measures and subsidized 
credit.
12 
4.2.3.2  Rural credit  4.2.3.2.1  General features 
4.22.  The provision of credit at fixed interest rates remains one of the most important tools to 
promote the agriculture sector in Brazil. This policy is employed to offset the country's high market 
interest rates and to promote the access of credit for farmers who would not obtain it otherwise in the Brazilian financial system. In the previous revi ew period, rural credit policy underwent a shift 
away from granting credit through public banks towards ensuring that financial resources were 
channelled to the agriculture sector through private financial institutions. However, during the present review period, the importance of publ ic banks as providers of rural credit grew 
significantly. At the same time, the Government  increased the requirement that commercial banks 
devote part of their demand deposits for agricultur al lending, so as to channel more private sector 
credit to productive sectors. The authorities co nsider this requirement necessary to correct a 
market failure, however, pre-assigning credit may be introducing other distortions in the overall 
allocation of credit in the Brazilian economy. 
4.23.  The institutional framework for agricultural credit has its basis in Law No. 4,829 of 
5 November 1965, which established the National System of Rural Credit (SNCR) under the control 
of the Central Bank. The National Monetary Council  (CMN) is in charge of issuing regulations for 
agricultural credit schemes, which are spelled out in the Central Bank's Rural Credit Manual . These 
regulations must be followed by all institutions participating in the SNCR, which includes public 
banks, cooperatives, and private commercial banks.
13 In December 2012, 468 financial institutions 
operated with rural credit, of which 28 were private banks.14  
                                               
10 WTO document G/AG/N/BRA/28, 2 October 2012. 
11 WTO document G/AG/N/BRA/27, 1 March 2012. 
12 OECD (2011). 
13 EMBRAPA (2010). 
14 Central Bank of Brazil online information. View ed at: http://www.bcb.gov.br/htms/creditorural/2012/ 
rel61.pdf. WT/TPR/S/283 • Brazil 
 
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  4.24.  Between 2008 and 2012, the share of rural credit provided through public banks increased, 
marking a shift away from the trend observed in the previous review period (2004-07), when it 
dropped from 60% to 48.1%. In 2012, public bank s provided 57.5% of total rural credit, followed 
by private banks (32.5%), and cooperatives (10%).15  
4.25.  According to the general rules for rural cr edit programmes, beneficiaries must reside in 
Brazil, but they are not required to be Brazilian nati onals. In the case of rural credit lines operated 
by majority government-owned financial institutions, financing may not be granted to companies 
headquartered abroad or companies whose voting  capital is majority-o wned by foreigners.16  
4.26.  Rural credit stems from a variety of sources: banks' demand deposits (mandatory 
resources), rural savings, constitutional funds, cr edit lines managed by the BNDES, free resources, 
the Brazilian Coffee Fund (FUNCAFE), the Worker's Support Fund (FAT), as well as other funds and 
sources. During the period under review, the sh are of rural credit financed with mandatory 
resources declined substantially, while sources such as rural savings, constitutional funds, and BNDES programmes rose in importance (Table 4.3).  
Table 4.3 Sources of rural credit, 2007-12 
(%) 
Source: WTO Secretariat, based on Central Bank of Br azil online information. Vi ewed at: http://www.bcb. 
gov.br/htms/CreditoRural/2012/rel5121.pdf. 
4.27.  Under Brazilian Law, public and private banks participating in the SNCR are required to 
allocate a certain proportion of their demand depo sits (mandatory resources) to the agricultural 
sector.17 The proportion is fixed at the discretion of the CMN. Alternatively, banks are allowed to 
transfer an equivalent amount to the Central Bank at zero interest.  
4.28.  In response to a credit crisis, the CMN in creased the required rate of mandatory resources 
to 30% of demand deposits in November 2008, up  from 25% at the time of the previous Review.18 
Despite this intervention, the share of rural cr edit financed with mandatory resources did not 
recover to previous levels and even faced a sharp decline in the first half 2012. The authorities 
indicated that this was due to the economic slow down and the subsequent contraction of demand 
deposits. The Government reacted by announcing a new rate of 34%, in force from 1 July 2012.19  
4.29.  Rural credit lines operated by banks with capital deriving from mandatory resources are 
subject to the rules laid out in the Rural Credit Manual . These include fixed interest rates, which 
were lowered to 5.5% per annum in 1 July 2012, down from 6.75%. The rate remains below average market rates for non-earmarked credits.
20 In addition, a substantial part of rural credit 
from mandatory resources must be channelled to specific purposes: 20% must be granted to 
cooperatives; 10% to operations under the PRONAF; and since 1 August 2011, 10% to credit lines under the newly created PRONAMP. Rural credit gran ted with free resources is also subject to the 
rules spelled out in the Rural Credit Manual .
21 
                                               
15 Central Bank online information. Viewed at: http://www.bcb.gov.br/htms/CreditoRural/2012/ 
rel51411.pdf. 
16 Central Bank of Brazil (2012). 
17 Article 21 of Law No. 4,829 of 5 November 1965. 
18 Central Bank of Brazil Resolution No. 3.623 of 14 October 2008. 
19 Central Bank of Brazil Resolution No. 4.096 of 20 June 2012. 
20 For instance, the SELIC, a comparable benchm ark for non-earmarked credits, was at 7.25% 
in March 2013, down from 13.75% in September 2008. 
21 Rural Credit Manual  (in Portuguese). Viewed at: http://www.bcb.gov.br/?RED-MANUMCR. Year Mandatory 
resources Rural 
Savings Constitutional 
Funds BNDES Free 
resources FUNCAFE FAT Other 
resources  
2007 55.5 17.9 7.6 4.6 3.8 3.2 4.0 3.4 
2008 47.4 26.0 8.8 5.8 4.8 2.9 1.3 3.0 
2009  48.3 26.1 7.3 7.0 4.2 2.2 1.2 3.7 
2010 46.8 30.2 7.9 6.6 2.0 1.9 1.2 3.4 
2011 47.3 30.8 7.6 6.8 2.8 1.6 1.3 1.8 
2012 34.3 32.1 8.5 8.6 4.5 1.6 1.2 9.8 WT/TPR/S/283 • Brazil 
 
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  4.30.  Under the equalization principle, resources from the National Treasury are used to cover the 
difference between market rates and those applied to  certain rural credit operations. However, this 
equalization principle is not used in the case of mandatory resources; the equalization principle applies only to resources from rural savings, th e BNDES, and cooperative banks. To access these 
resources, beneficiaries must have credit insurance, such as PROAGRO and rural insurance, to 
prevent losses to public and private banks. 
4.31.  The authorities have noted that the Brazilian  rural credit system aims at correcting a market 
failure which results in insufficient credit allocation to medium-, small and micro-produce farmers. 
As this policy is responsible for financing a major share of food production for internal consumption, they consider it important for the country’s food security. However, although it provides benefits to its recipients and aims to correct a market failure in the allocation of credit to 
the rural sector, the Brazilian rural credit system may be creating other distortions in overall credit 
allocation by limiting credit for other productive sectors, or making it more expensive. It may also be limiting commercial banks' policy options, as over one third of their demand deposits are now 
constrained by mandatory resources rules. The OECD notes that reforms could reduce the 
misallocation of resources and lower average intere st rates. Such improvements could benefit, in 
particular, medium-sized farmers and firms that are neither eligible for subsidized credit 
programmes, nor in a position to borrow on international markets.
22  
4.32.  In addition to rules on mandatory resources, the Rural Credit Manual  contains special 
provisions on rural savings schemes maintained by public banks (Banco do Brasil, Banco da Amazônia, Banco do Nordeste) and cooperatives . Since 1 July 2011, these institutions must 
allocate 68% of rural savings to rural credit oper ations (previously 65%). Ho wever, the rate is set 
to be reduced to 66% in July 2014.
23 The resources from rural savings that are allocated to rural 
credit operations may be offered at market interest rate or at preferential interest rates in a 
proportion that depends on the magnitude of resources addressed to equalization as decided by 
the authorities in each crop year. Rural savings are becoming an increasingly important source of rural credit in Brazil (see Table 4.3). In addition to the change in the perc entage required to be 
redirected to rural credit, this increase can be explained by the rise in the amount of deposits 
made in rural savings schemes, which reached R$ 93.9 billion in May 2012, up from R$77 billion 
in November 2010.
24 
4.33.  The Constitutional Funds are aimed at reducing regional inequalities through the financing of 
productive sectors, including agriculture. They consist of three regional funds: the FNO (North 
Region), the FNE (North-East), and the FCO (Centr e-West) (see Chapter 3.4.2.3.4). The funds are 
administered by Banco da Amazônia, Banco do Nordeste, and Banco do Brasil, respectively, and 
are capitalized with federal resources deriving from the Tax on Industrial Products (IPI) and the 
Income Tax (IR).25 There are a number of conditions attached to the application of these funds to 
rural credit, including a requirement that 10% of the credit be used in agrarian reform 
programmes.26 In 2012, the Constitutional Funds channelled R$9.5 billion to agriculture.27 
4.34.  As part of its efforts to counter the effects of the global economic crisis and promote the 
growth of agricultural production, the Government announced modifications to the rural credit system in 2012. The Agricultural and Livestock Plan for 2012/13 introduced lower interest rates 
and higher volumes of investment credit. The interest rate applied to most rural credit 
programmes was reduced from 6.75% to 5.5% per annum, with the exception of the ABC 
programme, for which it was lowered from 5.5% to 5%, and the PRONAMP, for which it was 
lowered from 6.25% to 5%.
28 
                                               
22 OECD (2011). 
23 Central Bank of Brazil Resolution No. 3,705 of 26 March 2009 and Resolution No. 4,097 of 
28 June 2012. 
24 Federal Government online info rmation. Viewed at: http://www.brasil.gov.br/noticias/arquivos/ 
2010/12/6/poupanca-mantem-saldo-positivo-ha-19-meses-seguidos and http://www.brasil.gov.br/noticias/ arquivos/2012/06/08/numero-de-depositos-da-poupanca-teve-o-melhor-resultado-da-historia-para-maio/print. 
25 Law No. 7,827 of 27 September 1999. 
26 Law No. 12,249 of 11 June 2010. 
27 Central Bank online information. Viewed at: http://www.bcb.gov.br/htms/CreditoRural/2012/ 
rel5121.pdf. 
28 MAPA (2012). WT/TPR/S/283 • Brazil 
 
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  4.35.  During 2007-12, rural credit continued to grow in both nominal and real terms.29 The 
Government foresees credits worth R$133 billion in the 2012/13 harvest year, of which R$115 billion for commercial agriculture and R$18 billion for family agriculture.
30  
4.36.  The high value of rural debt remains an important challenge in Brazil. A major renegotiation 
took place in 2008, covering contracts worth some R$75 billion. This value accounted for 85% of 
the total stock of rural debt (R$87.5 billion), part  of which dates back to the 1980s and 1990s. The 
renegotiation involved reduced interest rates, and extended repayment terms as well as discounts 
for anticipated payment.31  
4.2.3.2.2  Rural credit government programmes 4.37.  The Federal Government Loan (EGF) programme is used to finance the storage of 
agricultural products covered by the Policy of Guaranteed Minimum Prices (PGPM, see below). It 
allows farmers to withhold the sale of products fo r up to 240 days in anticipation of higher price 
levels. Agricultural products are used as collateral  and must be stored in warehouses accredited by 
the CONAB. The annual interest rate for EGF lo ans was lowered (from 6.75%) to 5.5% per annum 
for harvest year 2012/13. The maximum credit is fixed by product and may reach up 
to R$1.6 million for producers or up to 50% of production capacity for agro-industries.
32 This 
programme is complemented by the Special Marketing Credit Line (LEC), which operates under 
similar conditions. In contrast with the EGF, however, the LEC may apply to products not covered 
by the PGPM and need not use the minimum price as a parameter for calculating the amount to be financed.
33  
4.38.  During the review period, the Government discontinued the Rural Employment and Revenue 
Generation Programme (Rural PROGER), which prov ided credit to small producers with an annual 
income of less than R$80,000. In 2010, the programme was replaced by the Medium-Scale Agricultural Producer Support Programme (PRONA MP), which established a higher threshold of 
eligibility.
34 The programme is financed by several sources, including mandatory resources, rural 
savings, and BNDES funds. The Government foresees credits worth R$11 billion for the PRONAMP in harvest year 2012/13, up from R$5 billion disbursed in 2010/11.
35  
4.39.  Also in 2010, the Government launched the Plan for Low Carbon Emissions in Agriculture 
(Plano ABC), which comprises a credit line organized under the ABC programme (see below). Disbursements worth R$3.4 billion are foreseen for this programme in harvest year 2012/13.   
4.2.3.2.3  BNDES credit lines 
4.40.  The BNDES plays a major role in the financing of Brazilian agriculture, providing large sums 
of investment credit both directly to farmers and through accredited financial institutions (including public and private banks). The bank operates eight Federal Government programmes for 
agriculture; loans granted under these programme s totalled R$8.6 billion in harvest year 2011/12, 
which accounted for 8% of official rural credit  (Table 4.4). Under three of these programmes 
(PRONAMP, Programa ABC, and PRONAF), automatic access is facilitated by meeting certain 
domestic production requirements.  
                                               
29 BCB online information. Viewed at: ht tp://www.bcb.gov.br/?id=RELRURAL&ano=2010. 
30 MAPA online information. Vi ewed at: http://www.agricultura.gov.br/vegetal/estatisticas. 
31 Agencia Brasil online information. Viewed at: http://agenciabrasil.ebc.com.br/noticia/2008-08-06/ 
camara-aprova-mp-que-renegocia-parte-da-divida-dos-produtores-rurais. 
32 Banco do Brasil online information. Viewed at: http://www.bb.com.br/portalbb/page100,107,2913, 
9,1,1,2.bb?codigoMenu=417&codigoRet=2089&bread=40_3. 
33 MAPA (2012).   
34 MAPA online information. Viewed at: http://www.agricultura.gov.br/politica-agricola/noticias/2011/ 
07/cmn-aprova-mudancas-para-credito-rural. 
35 MAPA online information. Vi ewed at: http://www.agricultura.gov.br/vegetal/estatisticas. WT/TPR/S/283 • Brazil 
 
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  Table 4.4 Federal Government agricultural credit programmes administered by the 
BNDES, harvest year 2011/12  
Programme/description Financial conditions Disbursements  
(2011/12)  
Agricultural Cooperatives Capita lization Programme (PROCAP-Agro)   
Finances agricultural cooperatives by 
acquiring capital shares. Limit of 
R$50 million per cooperative.  Annual interest rate: 9.5% for financing working capital 
and 5.5% for other operations. 
Repayment period: 2 years for working capital and 6 years 
for other operations. R$2.5 billion  
Medium-Scale Agricultural Producer Support Programme (PRONAMP)   
Provides credit for investment in goods 
and services aimed at increasing 
productivity and income. Up to 100% of 
the product/project value may be 
financed. Beneficiaries must have annual 
gross income up to R$800,000, at least 
80% from agricultural activities. Annual interest rate: 5%.  
Repayment period: up to 8 years. 
For credits aimed at the acquisition of machinery and 
equipment, goods must be manufactured in Brazil and 
meet the following criteria: 
For automatic access :  
New items: must have at least 60% domestic content in 
both value and weight terms. 
Used items: must be certified as products made in Brazil.a R$2.1 billion  
Low Carbon Agriculture Programme (ABC Programme)   
Finances projects to reduce greenhouse 
gas emissions from agricultural activities.b 
Grants credits of up to R$1 million per 
farmer/cooperative. Annual interest rate: 5%.  
Repayment period: up to 5-15 years, depending on the 
project. For automatic access to credit for acquisition of 
machinery and equipment, goods must be manufactured 
in Brazil.c R$1.5 billion  
Programme to Strengthen Household Agriculture (PRONAF)   
Provides credit to small-scale producers 
with annual income up to R$160,000 per 
family. The BNDES operates six credit 
lines under this programme, focusing on: 
agri-industry; women; organic and agri-
ecological production systems; 
environmental technologies; productivity 
increase; and debt restructuring. Annual interest rate: 1% or 2%, depending on the credit 
line and the amount of credit requested. 
Repayment period: up to 10 years (generally). 
To access credit for acquisition of machinery and 
equipment, goods must be manufactured in Brazil. Credit 
for new machinery and equipment with less than 60% 
domestic content is limited to R$5,000 per item.d R$1.4 billion  
Programme for the Modernization o f Agriculture and the Conserva tion of Natural Resources 
(MODERAGRO)  
Finances projects to improve production 
systems and revitalize soil and pastures. 
Credit up to R$600,000 per producer, or 
R$1.5million per cooperative. Annual interest rate: 5.5%.  
Repayment period: up to 10 years. R$512 million  
Cooperative Development Programme for the Enhancement of Agricultural Value Added 
(PRODECOOP)  
Aimed at promoting efficiency gains in 
agribusiness cooperatives by financing 
studies, projects, works, acquisition of 
national and imported equipment, and 
working capital for investment. Credit up 
to R$100 million per cooperative.e Up to 90% of the project value may be financed.  
Annual interest rate: 5.5%. 
Repayment period: up to 12 years.  R$410 million  
 
Incentives Programme for Irriga tion and Storage (MODERINFRA)   
Finances irrigation and storage projects of 
up to R$1.3 million per farmer or 
R$4 million per cooperative. Annual interest rate: 5.5%.  
Repayment period: up to 12 years. R$228 million  
 
Tractor Fleet Modernization Ince ntives Programme (MODERFROTA)   
Grants credit for purchase of tractors, 
combine harvesters, and self-propelled 
sprayers. Finances up to 100% of the 
products value. Annual interest rate: 5.5%.  
Repayment period: up to 4 years. 
 R$14 million  
Total   R$8.6 billion  
a Circular Sup/Agris No. 26 of 23 July 2012.  
b The ABC programme finances proj ects aiming at: recovering de graded pastures; implementing 
organic agriculture; no-till farming; integrating cr op, livestock and forestry activities; planting and 
managing commercial forests; adjusting to environmental legislation; treatment of animal residues; palm (dendê) oil forests;  and nitrogen fixing.  
c Circular Sup/Agris No. 49 of 2 October 2012. d Circular Sup/Agris No. 37 of 22 August 2012.  e Projects related to processing products for hum an consumption run by central cooperatives may 
receive up to R$200 million. 
Source: BNDES online information. Viewed at: http: //www.bndes.gov.br; data on  disbursements based on 
MAPA online information. View ed at: http://www.agri cultura.gov.br/veget al/estatisticas.  WT/TPR/S/283 • Brazil 
 
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  4.41.  As of October 2012, the BNDES operated, in addition to Federal Government programmes, 
four credit programmes targeted at agriculture:  the Warehouse Incentive Programme for Domestic 
Cereal Producers (Cerealistas), the Programme of Support to the Renewal and Expansion of Sugarcane Fields (PRORENOVA), the Programme for the Revitalization of Companies (Revitaliza) 
and the Programme of Support to the Sugar and Ethanol Sector (PASS). In harvest year 2011/12, 
credit offered was R$30.6 million for beneficiaries of the Cerealistas programme and R$1.47 billion for the Revitaliza programme. There were no disbursements under the PRORENOVA and PASS 
programmes. 
4.42.  The agriculture sector may also benefit from general BNDES credit lines such as FINEM, 
BNDES Automatic and the BNDES Card. In 2009, credit lines aimed at the acquisition of agricultural machinery and equipment were centralized under the Programme for the Sustainability 
of Investment in Capital Goods (PSI-BK), which offers easier financial conditions. The PSI-BK 
g r a n t s  c r e d i t  a t  a n  i n t e r e s t  r a t e  o f  2 . 5 %  p e r annum and allows a repayment period of up to 
ten years.
36 In harvest year 2011/12, the programme disbursed R$6 billion in credit for the 
purchase of agricultural capital goods.37 Automatic access to the PSI-BK is granted for products 
produced in Brazil which must have a domestic content of 60% in both value and weight terms or meet the Basic Productive Process (PPB). If this is not the case, the request is examined before 
approval is granted. In addition, companies under the control of foreign capital may only benefit if 
they undertake activities considered to be of high national interest.
38  
4.2.3.3  Minimum price guarantees  4.43.  Brazil operates several programmes based on minimum price guarantees, which support the 
production of a wide range of commodities, includ ing corn, rice, cotton, and wheat. According to 
OECD estimates, price support schemes accounted for more than half of transfers granted to 
farmers during 2008-10. Their overall effect, howe ver, appears to be modest, as annual budgets 
are limited and partly targeted at less developed regions and low-income farmers.
39 
4.44.  The policy of guaranteed minimum prices  (PGPM), launched in 1966, remains an important 
pillar of Brazilian agricultural policy. The PGPM  is aimed at supporting producers when market 
prices fall to levels deemed harmful to their income stability. The policy is implemented by the 
National Food Supply Company (CONAB) through two types of schemes: commercialization instruments (which may involve the direct purchase of products by the CONAB), such as the AGF, PEP, VEP, PEPRO, COV and PROP (Table 4.5); and credit lines to finance the storage of goods 
covered by minimum price guarantees, such as th e EGF and LEC (see rural credit). The PGPM cost 
the Treasury an average of R$1.6 billion a year during 2008-11.
40  Most of the costs were linked to 
operations aimed at forming public stocks, which are sold when conditions are deemed convenient 
by the Government. As of 2011, the CONAB administered a network of 1,535 warehouses, with a 
storage capacity of 20,428,920 tonnes.  
4.45.  Revenues from the sale of public stocks are channelled to the Treasury or to bodies 
responsible for storage.41 Normally, annual costs under the PGPM exceed revenue collected with 
the sale of stocks. During the global economic crisis, net PGPM expenses increased significantly, reaching R$3.5 billion in 2009. In 2011, however, revenue exceeded costs, due to high market prices for agricultural products and the Government 's efforts to reduce accumulated public stocks. 
The Government adopted a policy of stepping up stock sales in order to counterbalance the 
increase in domestic prices caused by atypical climate features. As a result, total revenue for 2011 was R$1.7 billion and expenses reached R$1.2 billion for public buffer stocks and R$0.3 billion for 
guaranteed minimum prices. Total revenue for 2012 (up to November) was R$1.3 billion, while 
expenses for public stocks totalled R$0.9 billion and disbursements to guarantee minimum prices reached R$0.2 billion. Net revenue in both years reached some R$0.4 billion. 
                                               
36 BNDES Circular No. 55 of 6 September 2012. 
37 MAPA online information. Vi ewed at: http://www.agricultura.gov.br/vegetal/estatisticas. 
38 Activities considered of high national interest  are set out in Decree No. 2,233 of 23 May 1997, and 
include the automotive, energy, and electronics industries. 
39 OECD (2011). 
40 CONAB online information. Viewed at: http ://www.conab.gov.br/conteudos.php?a=1255&t=. 
41 CONAB (2012). WT/TPR/S/283 • Brazil 
 
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  Table 4.5 Price support programmes, 2012  
Price Support Programme/Description Use/Cost 
Policy of Guaranteed Minimum Prices (PGPM) 
Regulated by Decree No. 57,391 of 12 December 1965 and Decree-Law No. 
79 of 19 December 1966. The PGPM fixes minimum guaranteed prices 
annually for some of Brazil's main crops. Prices are promulgated by the 
National Monetary Council (CMN) through portarias (previously through 
decrees). Portaria No. 701 of 30 July 2012 fixes minimum prices for a 
number of products for the 2012/13 summer harvest. When determining 
minimum prices, the CMN takes into account production costs in the different 
regions, as well as several factors affecting domestic and international 
market prices. The PGPM is implemented through credit lines (EGF and LEC); 
and commercialization instruments (AGF, PEP, VEP, PEPRO, COV and PROP; 
see below).  The PGPM programme cost the 
Treasury about R$1.6 billion in 2011. 
However, the Government raised 
some R$1.66 billion in revenues by 
selling out its stocks, which resulted 
in a net surplus of R$60 million. 
Products covered by minimum prices 
in the 2010-11 harvest included: rice, 
wheat, sisal, and beans. 
Federal Government Acquisition Programme (AGF) 
The AGF allows producers and cooperatives to sell their products to the 
CONAB at a guaranteed minimum price, so as to support farmers' income 
stability and form public stocks. The instrument is applied on specific 
products and regions, for up to 100% of a farmer's production. Products 
purchased under the AGF must be stored in warehouses accredited by the 
CONAB. In 2011, the AGF was used to 
purchase rice beans, corn, and wheat. 
The Government acquired 
596,870 tonnes, of which 
396,327 tonnes was rice. Subsidies 
totalled R$340 million in 2011. 
Premium for Product Outflow (PEP)  
The CONAB grants an equalization premium to wholesalers who agree to pay 
farmers a reference price. The premium is determined in public auctions and 
generally reflects the difference between the reference price and the market 
price. In addition to gu aranteeing minimum prices for producers, the PEP is 
used to shift the supply of agricultural products across regions, so as to avoid 
shortages and prevent the accumulation of stocks. In theory, all products 
included in the PGPM can participate in the PEP; however, the programme 
has been used for only a few products so far, mainly cotton, corn, wheat, 
sisal, beans, rice, and wine.   Premiums paid under PEP totalled 
was R$279.5 million in 2011, of which 
R$190.6 million for rice, 
R$58.3 million for wheat, and 
R$30.6 million for sisal. 
Outflow of Product Value (VEP) 
As in the PEP, the VEP consists of payments of equalization premiums to 
buyers who agree to pay a minimum price to agricultural producers. The 
premiums are also determined in public auctions. However, in contrast with 
the PEP, where wholesalers acquire products from private stocks, the VEP is 
used to dispose of government stocks.  In 2011, the VEP was used only for 
corn: 221,112 tonnes of corn were 
sold through auctions for a value of 
R$19.3 million. 
Public Option Contracts (COV) 
The Government offers option contra cts to producers and cooperatives 
through public auctions. Winning bidde rs acquire the right to sell their 
products to the Government at a future date, for a pre-determined "execution 
price" (a minimum price plus storage and financial costs). If the execution 
price is lower than the market price on the due date, the option contract is 
not used. When it deems convenient, the Government may transfer its 
obligation to buy to another party. Th e scheme may be used for any product 
covered by the PGPM. In 2011, this instrument was used for 
rice, when 36,400 contracts, covering 
some 982,800 tonnes, were 
negotiated for a value of 
R$574.9 million. 
Private Option Risk Premium (PROP) 
Similar to the COV; the main difference is that the offer of option contracts 
comes from private entities. To limit the private-sector risk, the Government 
offers a risk premium. The value of the premium is determined in public 
auctions, with a maximum price set by  the Government. Winning bidders are 
those willing to accept the lowest premium value. The PROP was only granted for corn 
in crop year 2008/09 of the review 
period. The amount granted was 
US$11.3 million benefiting 
12,442 contracts. 
Agricultural Products' Sale Option Private Premium (PEPRO) 
This scheme offers producers and cooperatives the possibility to sell their 
product at a premium, equal to the difference between reference and market 
prices, fixed through an auction. In contrast to the PEP, premiums are paid 
directly to producers.  In 2011, the Government granted 
premiums for 64,300 tonnes of rice 
and 52,727 tonnes of wheat, for a 
total of R$10.5 million. 
Source: Law No. 11,775 of 17 September 2008; CONAB on line information. Viewed at: http://www.conab. 
gov.br/conteudos.php?a=1255&t=; and CONAB (2012), Relátorio De Gestão 2011 . Viewed at: 
http://www.conab.gov.br/conteudos.php?a=23&t=1.  
4.46.  The Brazilian Government also grants mini mum price guarantees to family farmers. Since 
2010, they are entitled to 20% of the PGPM's budget.42 The resources are channelled through the 
Price Guarantee Programme for Family Farming. Wh ile this programme affects the production of 
several commodities, it appears to have a small effect on agricultural prices.43  
                                               
42 MDA (2010). 
43 OECD (2011). WT/TPR/S/283 • Brazil 
 
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  4.2.3.4  Measures to promote family farming 
4.47.  Support for family farming is an increasingly important component of Brazilian agricultural 
policy. According to the Food and Agriculture Organization (FAO), Brazil is among the countries providing the highest support to family agricult ure in the Latin American and Caribbean region.
44 
Brazil has a ministry devoted especially to family farming and agrarian reform, the MDA (see 
above). Support measures for family farmers include preferential credit lines, rural extension, preferential rules in public procurement, rural insurance, and price guarantees (Table 4.6).  
Table 4.6 Budget allocated to family farmin g programmes and measures, harvest year 
2012/13 
Programme Description Budget  
Programme to 
Strengthen Household 
Agriculture (PRONAF) Subsidized credit to small-scal e producers with a gross annual 
income of up to R$160,000 per family. R$18 billion 
Food Purchase 
Programme (PAA) Support for commercialization of f ood products from family farms. 
The Government may buy directly from producers, to form 
strategic public stocks, supply public institutions or make 
donations to vulnerable population. It may also finance the storage 
of food products by family farming organizations, so as to allow 
later commercialization in more favourable conditions. R$1.2 billion 
National School 
Feeding Programme 
(PNAE)  Transfer of Federal Government f unds to support the supply of free 
meals in public schools. At least 30% of the amount transferred by the Federal Government under the PNAE must be used to acquire 
food products from family farmers. R$1.1 billion 
Rural Extension and 
Technical Assistance 
(ATER) Provision of free educational services aiming at raising the income 
of family farmers by improving production systems and promoting 
access to services and resources. R$542 million 
Family Farming 
Insurance Programme 
(SEAF) Guarantees for small farmers taki ng out credit for production 
activities under the PRONAF. Th e insurance covers 100% of the 
credit acquired plus the interest rates charged. To benefit from the 
programme, the loss must account for more than 30% of expected 
revenues. Indemnities are up to a maximum R$7,000 per farmer 
per harvest year. R$480 million  
Harvest Guarantee 
Programme (Garantia-
Safra)  Guarantees to family farmers affected by droughts or excessive 
rain in north-eastern Brazil. In surance payments are fixed at 
R$680 and transferred in five instalments. The number of insured 
farmers is set annually by the Managerial Committee. R$412 million 
Price Guarantee 
Programme for Family 
Farming (PGPAF) An indexation of the credit take n out by family farmers under the 
PRONAF, through which the price is fixed when the credit is granted. Upon repayment of the PRONAF's credit, if the price of 
the product financed has decreased, the farmer benefits from a 
discount from the amou nt due, equivalent  to the difference 
between the product's market price and the price set in the programme's index. The limit for the PGPAF bonus per farmer is 
R$7,000 each year. The programme covers 49 products, including 
corn, cotton, rice, milk, and oranges. R$90 million
 
Support for rural 
production activities 
under the Brazil 
Without Extreme 
Poverty Plan  Provision of technical assistance, seeds, and direct cash transfers 
to family farmers living in extr eme poverty (with a family income 
of less than R$70 per capita). Cash transfers are limited to 
R$2,400 per family and must be used in rural production activities. R$81 million 
Total budget   R$22.3 billion  
Source:  MDS online information. Viewed at: ht tp://www.mds.gov.br/segur ancaalimentar/fomento-a-
producao-e-a-estruturacao-produtiva-1/fomento-as -atividades-produtivas-r urais; CAIXA online 
information. Viewed at: http://www.caixa.gov.br/ voce/Social/Transferenci a/fomento/ index.asp; 
MDA online information. Viewed at: http://comu nidades.mda.gov.br/portal/saf/programas/, and 
MDA (2010), Plano Safra da Agricultura Familiar 2010-2011 . Viewed at: http://www.agricultura.pr. 
gov.br/arquivos/File/deral/psafra_ag_familiar_2010_11.pdf.  
4.48.  To benefit from Government programmes targeted at family farmers, producers must meet 
various criteria, including: residing in the rural establishment or nearby; not holding a property of 
                                               
44 FAO (2012). WT/TPR/S/283 • Brazil 
 
- 130 - 
 
  more than four fiscal modules45; employing predominantly their own family labour; and deriving at 
least half of their income from economic activi ties performed at the rural establishment. In 
addition, according to the rules for harvest year 2012/13, their annual gross income must not exceed R$160,000 per family (up from R$110,000 in 2011/12).
46 
4.49.  The provision of credit at fixed interest rate s is the main policy instrument for the support of 
family farming in Brazil. The Programme to Strengthen Household Agriculture (PRONAF) provides an umbrella for 16 credit lines, operated by public and private banks, including the BNDES. 
Interest rates applied under the PRONAF range from 0.5% to 4% and are among the lowest rates 
in the Brazilian financial system.
47 During the review period, the Government expanded the 
PRONAF by increasing credit limits, lowering interest rates, and raising thresholds for eligibility to its credit lines. As in other family farming programmes, the general income limit for participating in 
the PRONAF was raised to R$160,000 for harvest year 2012/13. Some beneficiaries (agrarian 
reform settlers and low-income farmers) are divi ded into special groups, which are entitled to 
easier financial conditions.
48 For instance, families with an annual income of up to R$10,000 are 
eligible for microcredit operations, which offer an annual interest rate of 0.5%.49 Credit limits 
under the PRONAF vary from R$2,500 (for microcredit) to R$40 million (for agri-industry cooperatives). In 2012, 1.8 million lending operations were completed under the PRONAF, for a 
total of R$15.9 billion. 
4.50.  The Family Agriculture Plan for harvest year 2012/13 foresees investments worth 
R$22.3 billion in family agriculture programmes, of which R$18 billion for credit under the PRONAF.
50  
4.51.  In addition to providing credit lines, insurance schemes, technical assistance, and price 
guarantees, the Government has other measures to facilitate market access for family farmers. For 
instance, under the Food Purchase Programme (PAA), launched in 2003, the Government 
purchases products from family farmers with a view to supplying public institutions and making 
donations to low-income citizens. In addition, si nce 2009, as part of the National School Feeding 
Programme (PNAE), primary schools integrating the public education system must use food 
purchased from family farmers when supplying student meals. In both the PNAE and the PAA, 
purchase prices are determined by the Government and procurement procedures are exempt from tendering requirements.
51 The Government has also taken steps to promote access for family 
farmers to the biodiesel market, under the Soci al Fuel Seal initiative (Chapter 4.4.3).  
4.2.3.5  Other domestic support measures 
4.52.  The Rural Product Certificate (CPR), created in 1994, is a financial instrument that allows 
producers to sell their crops prior to the harvest and thus obtain resources to finance rural 
activities. The CPR may be issued by producers or cooperatives, who assume the obligation to 
deliver a certain amount of commodities at a future date. The "CPR Financeira" allows for 
                                               
45 The size of a fiscal module depends on the geogra phic region in which it is located.  One module 
varies from 0.5 hectares in Southern Br azil to 100 hectares in the Amazon.   
46 Central Bank of Brazil (2012). 
47 MDA online information. Viewed at: http://www.mda.gov.br/plano-safra/xowiki/quadro. 
48 Group A comprises agrarian reform settlers, Group B consists of families with an annual gross income 
of up to R$10,000 (eligible for microcredit) and Group A/C comprises agrarian reform settlers who have already received credit under group A. 
49 The eligibility threshold for microcredit was increased from R$6,000 in 2011/2012. 
50 MDA online information. Viewed at: http://www.mda.gov.br/portal/noticias/item?item_id=10368071 
51 Law No. 11,977 of 16 June 2009 and Resolution No. 39 of 26 January 2010. Product prices for the 
PAA are calculated according to the methodolog y defined in Resolution SESAN/MDS No. 39, of 
26 January 2010. They vary according to the type of product: for grains they are based on the official average price received by producers; for ve getables, on the average price in the wholesale market; and for processed 
goods on the average price prevailing in the local wholesale market, or if this is not possible, in the regional wholesale market. Where data are not available, prices will be defined through documented research on the 
prices paid to farmers by three loca l retailers. The reference purchase prices under the PNAE are the prices 
paid under the PAA. For localities where there is no  PAA price, the methodology defined under Resolution 
CD/FNDE No. 38, of 16 July 2009 applies. In this case, prices vary according to the total value of the purchase, 
and may be based on prices paid to farmers by local retailers; average prices in the wholesale market; or 
prices verified in publ ic bidding processes. WT/TPR/S/283 • Brazil 
 
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  liquidation in cash and is often used as collateral for acquiring credit. Farmers may obtain 
guarantees for the CPR at Banco do Brasil and other banks.52  
4.53.  Farmers and cooperatives who sell their products in the futures market may access credit 
lines by discounting a rural promissory note (NPR) or a rural duplicata (DR), which allow them to 
receive proceeds from the sale before the harvest. This type of credit can be obtained at Banco do 
Brasil or other financial institutions. Up to 7% of mandatory resources to finance rural credit may be used by banks to discount NPRs and DRs.
53  
4.54.  The Brazilian Government seeks to promote the private rural insurance market by 
"equalizing" (covering the difference between a fixed premium and market rates) insurance premiums on agricultural production.
54 Since 2005, Brazil has operated the Programme of Support 
to Rural Insurance Premiums (PSR), through which it may cover up to 70% of the insurance policy 
value contracted by producers. Equalization payments may be up to R$96,000 per beneficiary.55 
The area covered by the programme increased to 5.58 million hectares in 2011, from 2.28 million 
in 2007. Payments disbursed through the PSR reached R$253.5 million in 2011, benefiting 
40,109 producers with an average equalization cost of R$6,319 per producer.56 Soybeans received 
the highest level of support, followed by corn , apples, wheat, and grapes. In 2010, Congress 
approved the creation of a new fund for additional coverage of insurance risks, to be financed with 
resources from the Federal Government.57  
4.55.  The Government's Agricultural Livestock Guarantee Programme (PROAGRO) covers losses 
related to natural disasters, plagues or diseases affecting livestock. To be nefit from the PROAGRO, 
producers must pay a premium fee, set at 2% fo r the family farmers with PRONAF, and 3% for 
other producers. Since 2004, the Government has included a new modality in the programme, the 
PROAGRO MAIS, which targets family farmers. Indemnities through the PROAGRO to producers (including family farmers) reached R$675 million in 2008/09, fell to R$61 million in 2009/10
58, 
rising again to  R$239 million in 2010/11, and R$770 million in 2011/12. Producers benefiting from 
the PROAGRO may not receive subvention through the PSR scheme.  
4.56.  In 2007, the Government opened the Brazilian reinsurance market to international 
reinsurers, so as to stimulate competition and reduce premium values (section 4.5.2.2).59 
Previously, this market was monopolized by the Instituto de Resseguros do Brasil  (IRB), a majority 
state-owned company.60  
4.57.  The Brazilian Coffee Fund (FUNCAFE), established by Decree Law No. 2,295 of 21 November 
1986, finances research, infrastructure projects, rural extension, and the promotion of Brazilian 
coffee abroad. The fund may also be used to suppor t prices and provide subsidized credit to coffee 
producers. The National Monetary Council defines the conditions for credit lines financed with 
FUNCAFE resources through periodic resolutions. Resolution CMN No. 4,099 of 28 June 2012 
reduced interest rates to 5.5% a year, down from 6.75%. The credit limit is set at R$800,000 per producer. In 2011, the FUNCAFE had a total budget of R$2.7 billion, of which R$2.1 billion was 
channelled to subsidized credit lines.
61 
4.3  Manufacturing 4.58.   Brazil hosts a highly diversified manufactur ing sector. During the review years, partly in 
response to a loss of dynamism of the sector, increasing imports and slow-growing exports, the 
Government gave strong priority to industrial policy through two comprehensive nationwide plans, 
the Productive Development Policy (2008-10) and the Plano Brasil Maior  (2011-14). Instruments 
                                               
52 MAPA (2008).   
53 Central Bank of Brazil (2012). 
54 Official support to rural insurance schemes is regulated by Law No. 10,823 of 19 December 2003, 
which allows the Government to grant subsidies fo r insurance premiums on agricultural production. 
55 Decree No. 7,059 of 29 December 2009. 
56 MAPA (2012). 
57 Supplementary Law No. 137 of 26 August 2010. 
58 BCB online information. Viewed at: http://w ww.bcb.gov.br/htms/proagr o/PROAGRO_Relatorio_ 
Circunstanciado_1999-2010.pdf. 
59 Supplementary Law No. 126 of 15 January 2007. 
60 MAPA (2008).   
61 MAPA (2012). WT/TPR/S/283 • Brazil 
 
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  used to promote the manufacturing sector under these plans include credit lines under favourable 
conditions, public procurement, fiscal incentives, and border measures.  
4.59.  The manufacturing sector employs over 12 million people. In 2009, the foods and beverages 
industry was the largest employer, with 19.5% of  workers in the sector, followed by apparel and 
accessories (15.6%), and textiles (7.5%).62 The contribution of manufacturing to GDP decreased 
during the review period, from 14.6% in 2007 to 11.3% in 2012 (Table 1.1).  
4.60.  After a period of surplus during 2003-06, the trade balance for the manufacturing sector 
registered a deficit in 2007, and this has been deteriorating rapidly in recent years (Chart 4.2). 
Although total trade in manufactured products increased by 61.2% in 2007-12, most of this 
growth was led by imports: exports increased by on ly 9.3% in the period, while imports more than 
doubled, to US$163.2 billion in 2012. Machinery and transport equipment remained the largest 
import subsector (Table AI.2). The manufacturing sector's trade balance registered a record deficit 
of US$81.3 billion in 2012.63 
Chart 4.2 Trade in manufactured products, 2006-12 
(US$ million) 
-200,000-180,000-160,000-140,000-120,000-100,000-80,000-60,000-40,000-20,000020,00040,00060,00080,000100,000
2006 2007 2008 2009 2010 2011 2012Exports Imports Trade balance
 
Source: WTO Secretariat, based on UNSD Comtrade database. 
4.61.  Domestic demand has expanded strongly in the last decade, and the market share of 
imports of manufactured products has been increa sing and capturing a significant part of the 
growth in consumption. According to a recent study conducted by the National Industry 
Confederation (CNI), the import coefficient of the manufacturing sector (i.e. the participation of imported products in the domestic consumption of industrialized goods, including the consumption of intermediary inputs in industrial activi ties) doubled between 2003 and 2011, to 20.7%.
64  
4.62.  The industrial production sector grew more slowly than GDP in 2007-11, at an annual 
average of 1.4%. Although output grew relatively  rapidly in 2007-08, the economic crisis led to a 
sharp decline of 7.3% in 2009. Despite a strong recovery in 2010, industrial production stagnated 
in 2011, and fell by 3.6% in the first three quarters of 2012.65 Brazil's low output figures reflect 
several structural issues that have lowered the competitiveness of Brazilian manufactured products vis-à-vis  international competitors (Chapter 1.6).  
                                               
62 MDIC (2012). 
63 UNSD, Comtrade database. 
64 CNI (2012). 
65 Central bank of Brazil online information.  Viewed at: http://www.bcb.gov.br/?INDECO. WT/TPR/S/283 • Brazil 
 
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  4.63.  In May 2008, the Government adopted the Productive Development Policy (PDP) as a 
framework policy for the manufacturing sector. The PDP established four macroeconomic targets to be met by 2010: to increase the participation of fixed investment in GDP from 17.4% (in 2007) to 21%; to increase Brazil's share in world exports from 1.18% to 1.25%; to raise corporate 
spending in R&D from 0.51% to 0.65% of GDP; and to increase by 10% the number of small and 
medium enterprises engaged in exports. In or der to achieve these goals, the Government 
implemented a wide range of measures, including fiscal incentives, the provision of credit, the 
simplification of customs procedures, and technical assistance to export companies.
66 
4.64.  The Government notes that the PDP was launched during favourable economic conditions, 
both domestically and abroad. However, due to the negative effects of the economic crisis, only one of the PDP goals was met by 2010 (Brazil's participation in world exports). Nevertheless, in 
the Government's evaluation, the PDP was essential to increase the resilience of Brazilian industry 
in a period of crisis and intense market competition.
67  
4.65.  In August 2011, as a response to the continued effects of the economic crisis and the 
growing trade deficit in the manufacturing sector, the Government launched the Plano Brasil Maior , 
w i t h  t h e  g o a l  o f  s u s t a i n i n g  g r o w t h  i n  t h e  f a c e  o f  a n  a d v e r s e  g l o b a l  c o n t e x t .  T h e  P l a n  i s  m o r e  comprehensive than its predecessor (the PDP), having set ten targets to be met by 2014.
68 The 
following priorities have been established under the Brasil Maior : to build and strengthen 
competencies in the national economy; to enhance productivity and technology density within value chains; to expand domestic and external markets for Brazilian companies; and to ensure 
socially inclusive and environmentally sustainable growth.
69  
4.66.  The Plano Brasil Maior  comprises a wide range of measur es, some of which may have an 
effect on trade. For instance, in procurement policy, the Government introduced preferential 
margins of up to 25% for certain domestic goods and services, including several manufactured 
products (Chapter 3.4.4). Other measures include border measures, provision of credit at 
attractive conditions, and fiscal incentives. 
4.67.  Many of the measures announced under Plano Brasil Maior  were designed to support sectors 
suffering from a loss of competitiveness. The INOVAR-AUTO programme, effective from 2013, 
seeks to promote technological development in the Brazilian automotive industry, which faced intense competition during the review period, both in domestic and international markets. Between 2007 and 2012, imports of automotive products gr ew 131%, while Brazilian exports increased by 
around 5%. As a result, Brazil's trade balanc e in automotive products reached a deficit 
of US$10.4 billion in 2012, down from a surplus of US$4.8 billion in 2007.
70 
4.68.  Under plan, the Government has adopted significant fiscal incentives to help the domestic 
auto industry recover from the effects of the global crisis. In December 2011, it increased the IPI 
tax on automotive products (48 tariff lines) to between 30% and 55%, and simultaneously granted 
a 30% IPI reduction to products originating in Brazil and in some of its preferential trade partners 
(MERCOSUR and Mexico). To benefit from these tax breaks, companies had to prove more than 
65% of regional content. In addition, they had to  invest in R&D and perform a minimum number of 
production steps in Brazil. These tax breaks were effective until 31 December 2012.71 
4.69.  From 1 January 2013, the automotive sector's fiscal regime was superseded by the 
INOVAR-AUTO programme, established by Law No. 12,715 of 7 September 2012; the previous tax 
breaks no longer apply. Companies eligible for the programme may benefit from an IPI tax 
                                               
66 MDIC online information. Viewed  at: http://www.mdic.gov.br/pdp/i ndex.php/sitio/conteudo/index/3. 
67 Federal Government online info rmation. Viewed at: http://www .pdp.gov.br/Relatrios/Resumo%20 
Executivo_vers%C3%A3o%20final.pdf. 
68 The Plano Brasil Maior set targets on: fixed capital formation; Brazilian participation in world exports; 
spending on R&D, number of exporting companies; educ ational level of industrial workers; national value-
added in manufacturing (value-added/turnover ratio); prop ortion of knowledge-intensive manufacturing in total 
industrial production (value added of high-tech manufacturing/ total manufacturing value added); energy 
intensity; ratio of value-added in gross turnover of energy goods manufacturing; and household access to 
broadband internet connection. 
69 MDIC online information. Viewed at: http://www.brasilmaior.mdic.gov.br/images/data/201205/ 
ac36870491379be10d85230b0a3bf526.pdf.    
70 WTO Secretariat, based on  UNSD Comtrade database. 
71 Decree No. 7,567 of 15 September 2011, as amended by Decree No. 7,604 of 10 November 2011. WT/TPR/S/283 • Brazil 
 
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  reduction of up to 30% on automotive products. Decree No. 7,819 of 3 October 2012 outlines a 
number of general and specific conditions under which three categories of eligible companies may benefit from fiscal incentives: companies that (i) manufacture, (ii) commercialize or (iii) plan to manufacture products listed in Annex I of the Decree  (covering 52 tariff lines) in Brazil. In order to 
qualify for the INOVAR-AUTO, vehicle manufacturers must comply with energy-efficiency 
requirements and meet at least three of the fo llowing four conditions: perform a minimum number 
of manufacturing steps in Brazil for at leas t 80% of vehicles produced; invest a minimum 
percentage of the company's gross revenues in R&D activities in Brazil; invest in engineering, 
basic industrial technology, and supplier training; and participate in the Brazilian vehicle tagging programme (PBEV) for a minimum percentage of the company's output. These requirements are set to increase gradually, beginning in 2013 (Table 4.7). 
Table 4.7 Timetable for compliance with  INOVAR-AUTO Programme requirements 
(manufacturing companies) 
Requirement  2013 2014 2015 2016 2017 
Minimum manufacturing steps in Brazil  
Light vehicles 
Heavy vehicles  6 out of 12   
8 out of 14   7 out of 12   
9 out of 14   7 out of 12   
9 out of 14   8 out of 12   
10 out of 14   8 out of 12   
10 out of 14   
Minimum local investment in R& D  (% of gross revenues (after-tax)  
 0.15 0.3  0.3  0.5  0.5  
Engineering, basic industrial te chnology and supplier training  (% of gross re venues (after-tax)  
 0.5 0.75 1 1 1 
Tagging (% of vehicles produced)  
 36 49 64 81 100 
Source: Decree No. 7,819 of 3 October 2012. 
4.70.  Companies planning to start new industrial  projects after 2013 will be subject to similar 
requirements as manufacturers currently established in Brazil; however, the timetable for 
compliance will be shifted according to the year of entry into the programme. Moreover, each new industrial project will be subject to approval by the Ministry of Development, Industry and Foreign 
Trade (MDIC), which analyses the investment projects with respect to the requirements. 
4.71.  Companies that only trade automotive pr oducts are not subject to the requirement on 
minimum manufacturing steps in Brazil; however, to qualify for the programme, they must meet 
the three other conditions (investment in R&D; tagging; and engineering, basic industrial 
technology and supplier training).
72 Companies that comply may bene fit from an IPI tax reduction 
of up to 30% on imported vehicles, for a maximum of 4,800 units per year.73 Companies that do 
not have plans to manufacture automotive products in Brazil may still benefit from the incentives, 
provided they meet the above-mentioned criteria . There is an additional IPI tax reduction for 
imports, based on previous performance, for a maximum of 4,800 units per year on a MFN basis.  
4.72.  Until 31 July 2016, companies that manufacture or plan to manufacture automotive 
products in Brazil may benefit from a 30% IPI tax reduction on imports of vehicles originating from 
MERCOSUR and Mexico.74  
4.73.  On 20 September 2012, in the context of the Committee on Trade-Related Investment 
Measures, Australia and the European Union submitted questions on several aspects of the 
INOVAR-AUTO programme and raised concerns about the apparent incompatibility of some of its 
provisions with WTO rules.75 On 5 October 2012, Brazil provided clarifications and indicated that 
new regulations on the programme would be issued in the coming months.76 
                                               
72 Article 6 of Decree No. 7,819 of 3 October 2012. 
73 Article 22 of Decree No. 7,819 of 3 October 2012. 
74 Article 21 of Decree No. 7,819 of 3 October 2012. 
75 WTO document G/TRIMS/W/110, 20 September 2012. 
76 WTO document G/TRIMS/W/114, 5 October 2012. WT/TPR/S/283 • Brazil 
 
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  4.74.  As of late November 2012, six companies had been accepted into the INOVAR-AUTO.77 The 
programme will be in force until 31 December 2017. 
4.75.  In addition to automotive products, the Government has announced tax incentives to 
Brazilian manufacturers of a wide range of manufactured goods under the Plano Brasil Maior . The 
fiscal measures include IPI tax reductions on several consumer and capital goods and the 
substitution of employers' social security cont ributions by a (lower) tax applied to corporate 
revenues, which will benefit 31 industrial segments.78 The total value of tax reductions to be 
granted under the plan is estimated at R$44.2 billion in 2012, R$46.1 billion in 2013, and 
R$46.2 billion in 2014, mainly to the manufacturing sector.  
4.76.  The Plano Brasil Maior  has also amplified a number of programmes aimed at providing 
support to producers and exporters of manufac tured products. The BNDES Programme for the 
Sustainability of Investment (PSI) was exte nded until 31 December 2012 and its budget was 
increased to R$227 billion.79 The PSI finances the production, acquisition, and export of capital 
goods through four different subprogrammes (Capit al Goods, Innovation, Export Pre-shipment, 
and Knowledge-intensive Projects). The BNDES' PROGEREN, a programme to finance working 
capital for companies in a wide range of sectors, was expanded to include producers of automobile 
parts, furniture, and wood articles. The PROGEREN had resources of up to R$14 billion until 
31 December 2012, when it was due to be terminated.80 The termination date was later 
rescheduled to 31 March 2013. The BNDES' REVITALIZA, providing credit to sectors negatively affected by the appreciation of the real, was widened to support some 19 industrial segments.
81 
The programme, with a total budget of R$6.7 billion, is scheduled to be in force until 
31 December 2013.82  
4.77.  Brazilian exporters of manufactured produc ts are eligible for a number of export finance 
programmes run by Banco do Brasil (PROEX) and the BNDES (EXIM, REVITALIZE EXPORTS) 
(Chapter 3.3.5). 
4.78.  The average MFN applied tariff for manufacturing products (ISIC definition) was 12.0% 
in 2012, up from 11.8% in 2008. A considerable proportion of the 100 tariff lines whose applied 
rates were increased in 2012 are manufactured goods. Clothing, textiles, and transport equipment 
benefit from the highest tariff protection among WTO categories of products, with average MFN applied tariffs of 35.0%, 22.7%, and 18.8%, respectively. Besides tariff hikes, the Government has taken a number of border measures to boost the domestic manufacturing industry under the 
Plano Brasil Maior , such as increasing the number of manufactured products that require non-
automatic import licensing, and strengthening trade defence mechanisms (Chapter 3.2). 
4.79.  In addition to the measures launched under the PDP and the Plano Brasil Maior, 
manufacturing benefits from a wide range of su pport initiatives granted at the federal and sub-
federal levels. These include: fiscal incentives granted to manufacturers established in the Manaus Free Trade Zone (ZFM)
83; the Programme of Support to the Technological Development of the 
Semiconductors Industry (PADIS), which provides tax incentives to IT companies that invest at 
least 5% of domestic revenues in R&D84; and the BNDES PROFARMA, which finances the 
pharmaceutical sector.85 Some support programmes are linked to Basic Productive Process (PPB) 
                                               
77 MDIC online information. Viewed  at: http://www.desenvolvimento.gov.br/sitio/interna/noticia.php? 
area=2&noticia=11993. 
78 Federal Government online info rmation. Viewed at: http://www2.p lanalto.gov.br/imprensa/noticias-
de-governo/Novos_Setores_Benef iciados_com_a_desoneracao.pdf. 
79 Law No. 12,712 of 30 August 2012. 
80 BNDES online information. Viewed at: http ://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/ 
Institucional/Sala_de_Imprensa/Noticias/2012/todas/20120605_progeren.html. 
81 The BNDES REVITALIZA supports manufacturers of: textiles; clothing; leather articles;  shoes; wood 
products; wood, cork and plaiting material; fertilizer s and pesticides; ceramics; electronic equipment; IT 
equipment; medical materials; ba tteries for vehicles; automotive parts; fu rniture; and toys. 
82 BNDES online information. Viewed at: http ://www.bndes.gov.br/Site BNDES/bndes/bndes_pt/ 
Institucional/Sala_de_Imprensa/Notic ias/2011/todas/20110802_brasil_maior.htm. 
83 SUFRAMA online information. Viewed at: http: //www.suframa.gov.br/suframa-publicacoes-cartilha-
incentivos-fiscais.cfm. 
84 APEX online information. View ed at: http://www.apex brasil.com.br/portal/p ublicacao/engine.wsp? 
tmp.area=509&tmp.texto=5241. 
85 BNDES online information. Viewed at: http ://www.bndes.gov.br/Site BNDES/bndes/bndes_pt/ 
Areas_de_Atuacao/Inovacao/Profarma/index.html. WT/TPR/S/283 • Brazil 
 
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  criteria, which constitute agreed manufacturing steps established to recognize the degree of 
national industrialization of a product (Chapter 3.4.2). 
4.4  Energy 4.4.1  Overview 
4.80.  Following the discovery of major reserves in 2007-08, Brazil's regulatory framework for oil 
and gas exploration and production (E&P) was amended in 2010 with a view to allow for an increased state participation in E&P activities. Exclusive rights were granted to state-controlled 
PETROBRAS in designated geographic blocks, and a production-sharing regime was introduced for 
strategic blocks and blocks located in the "pre-salt" polygon. Oil and gas E&P activities remain subject to local-content requirements. In 2009, Brazil adopted a new Gas Law introducing tendering for concessions in the downstream segment of the natural gas sub-sector. Private-sector 
participation in the electricity market has been expanding through Government auctions and 
concessions, but state-owned companies still play an important role. Brazil remains the world's second-largest producer of ethanol, but was outp erformed by the United States as top exporter 
in 2011. After a decline in biofuel exports between 2009 and 2011, the Brazilian Government 
introduced new programmes offering subsidized  credit for the ethanol production chain.  
4.4.2  General features 
4.81.  Brazil is nearly self-sufficient in primary energy production; in 2011, it produced 
256.8 tonnes of oil equivalent (toe), which accounted  for 94.3% of its energy needs. The Brazilian 
energy matrix remains one of the greenest in the world, but the participation of renewable sources 
in total energy production decreased during the review period.  
4.82.  Under the National Constitution, Brazil 's hydro-energy sources and mineral resources 
(including petroleum and gas), whether they are found in the subsoil, the continental shelf or in the exclusive economic zone, are the excl usive property of the Brazilian State.
86 
4.83.  In March 2010, the Federal Government launched the second phase of the Growth 
Acceleration Programme (PAC2), aimed at increasing both private and public investments in infra-structure. It is expected that R$461.6 billion w ill be invested in the energy sector between 2011 
and 2014 under PAC2, up from an estimated R$275 billion in the first phase of the programme 
(2007-10). According to the authorities, PAC2 investments in the energy sector amounted 
to R$33.8 billion in 2011.
87  
4.84.  The Ministry of Mines and Energy (MME) defines the general policy for the energy sector and 
presides over the National Energy Policy Council (CNPE), which formulates policies and regulations 
pertaining to hydrocarbons, biofuels, and electricity.88 Policy for the ethanol and sugar industry is 
also determined by the Inter-Ministerial Council for Sugar and Alcohol (CIMA).89 There are two 
autonomous regulatory agencies linked to the MME: the National Agency for Petroleum, Natural 
Gas and Biofuels (ANP), which regulates hydrocarbons and biofuels (except for state-level distribution of natural gas); and the National Agen cy for Electrical Energy (ANEEL), responsible for 
regulating and overseeing the electricity sector . In the downstream segment, all activities 
involving petroleum products, as well as the transportation, processing, storage, liquefaction and re-gasification of natural gas, remain subject to ANP authorization, while importation and exportation are subject to authorization by the MME. 
                                               
86 Article 20 of the Brazilian Constitution. 
87 MME online information. Viewed at: http://www. mme.gov.br/se/noticias/destaque_foto/destaque 
_0084.html. 
88 The CNPE is composed of representatives from nine ministries, including the MME, as well as 
representatives from the federative states, civil society, and the Energy Research Company (EPE). 
89 The CIMA is composed of representatives of the Mi nistries of Agricu lture, Livestock and Food Supply 
(MAPA); Mines and Energy (MME); Finance (MF); and Industry, Development and Foreign Trade (MDIC). Decree No. 3,546 of 17 July 2000. WT/TPR/S/283 • Brazil 
 
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  4.4.3  Hydrocarbons 
4.4.3.1  Market features 4.85.  In 2011, 8.6% of total FDI inflows to Braz il (over US$24 billion) were channelled into oil and 
gas E&P, making it the second most important destination of inward FDI.
90 Petroleum production in 
Brazil has been expanding steadily: total output was 768 million barrels in 2011, a 20.5% increase 
from 2007. Notwithstanding the growing domestic demand, Brazil became a net exporter of crude oil for the first time in 2007 and has significan tly expanded its oil trade surplus since then. 
In 2011, the volume of exports was 1.68 times that of imports, with 203 million and 121 million 
barrels, respectively. Nevertheless, Brazil's depend ency on imports of refined petroleum products 
has increased. Although domestic refining capacity grew by 9% in 2007-11, imports of refined products grew by 90% (in volume terms) in the same period. The authorities noted that Brazilian 
refineries were built to refine light imported oil, while most of the oil extracted in Brazil is heavy 
oil, and not well suited to be refined in those refineries. Hence, Brazil exports its heavy crude oil in order to import light crude oil for refining. PETROB RAS has been working to adapt its refineries to 
process heavy oil produced locally, but as yet does not have capacity to refine its full production of 
heavy oil. Furthermore, while PETROBRAS is responsible for most of Brazil’s crude oil production, other producers may export all their production of heavy oil, since there is no obligation to sell it to 
refineries in Brazil.  
4.86.  Brazil also relies on substantial imports of natural gas; although domestic production 
increased 41% between 2007 and 2012, imports still accounted for around 45% of the country's needs. In 2012 (up to November), Brazil imported 11.9 billion cubic meters of natural gas, mostly 
from Bolivia (77% of total natural gas imports).
91 
4.87.  As in the previous review period, PETROB RAS has maintained its dominant position in the 
production, refining, distribution, and retail market  of petroleum and petroleum products in Brazil. 
In 2011, the state-controlled company accounted for some 90% of total oil production.92 
PETROBRAS also owns 98% of Brazil's total refini ng capacity (12 of the 16 refineries). Although 
the company faces more competition in the dist ribution and commercialization of petroleum 
products, it remains a market leader in both segm ents. In 2011, it accounted for 30% of gasoline 
and 40% of diesel distribution.93 Also, it is the only company to have service stations across the 
entire Brazilian territory, with 20% of the total number of stations.94 In 2012, PETROBRAS 
accounted for 67.4% (in value terms) of all imports of petroleum-based products; the 
corresponding figure for exports was 77.6%. As of late 2012, Brazil hosted 9,489 km of gas 
pipelines, 69.3% of which were operated by TRANSPETRO, a subsidiary of PETROBRAS. The 
remaining pipelines were operated by three pr ivate companies, two of which have PETROBRAS 
among its shareholders. 
4.88.  PETROBRAS is a publicly traded joint-stock corporation; by law, the Federal Government's 
participation in its voting capital must be at least 50% plus one share.95 Although foreign and 
Brazilian private investors retain the majority of  PETROBRAS' capital stock, the Government has 
increased its participation in the company since Brazil's last Review. In September 2010, PETROBRAS conducted a major public share offering, raising R$120 billion.
96 In this process, the 
Brazilian Government increased its capital stock ownership from 40% to 48%. The Government 
also increased its voting shares to 64% in 2011, up from 55.7% in 2008.97 
4.89.  Since 2002, fuel prices in Brazil must be set freely by the market.98 However, in practice, 
PETROBRAS has a quasi-monopoly over Brazil's refining capacity and can therefore define 
                                               
90 Information provided by the Brazilian authorities. 
91 Information provided by the Brazilian authorities; and ANP (2012). 
92 PETROBRAS online information. Viewed at: http:/ /www.investidorpetrobras.c om.br/en/presentations/ 
petrobras-at-a-glance.htm. 
93 ANP (2012). 
94 PETROBRAS online information. Viewed at: http:/ /www.investidorpetrobras.c om.br/en/presentations/ 
petrobras-at-a-glance.htm. 
95 Article 62 of Law No. 9,478 of 6 August 1997. 
96 PETROBRAS (2011). 
97 PETROBRAS online information. Viewed at: http:/ /www.investidorpetrobras.c om.br/en/presentations/ 
petrobras-at-a-glance.htm. 
98 ANP online information. Viewed at: http://www.anp.gov.br/?pg=8358. WT/TPR/S/283 • Brazil 
 
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  ex-factory prices. Having kept gasoline refinery prices virtually unchanged since June 2009, 
PETROBRAS increased them by 10% in November 2011 and 7.83% in June 2012.99 On both 
occasions, the Government simultaneously reduced the Contribution for Intervention in the Economic Domain (CIDE)
100, a levy applied to gasoline, so as to maintain consumer prices 
unaltered.101 
4.90.  Since 2007, PETROBRAS has announced the discovery of major oil and gas reserves in the 
"pre-salt" layer, where oil deposits can reach a depth of 7,000 meters below the sea surface. 
Some of these discoveries have been confir med and added to Brazil's proven reserves, 
contributing to a 19% growth in oil reserves and a 26% growth in natural gas reserves in 2007-11. As of 31 December 2011, proven reserves of crud e oil amounted to 15 billion barrels, while those 
of natural gas reached 459 billion cubic meters. If other recent discoveries are confirmed by 
the ANP, Brazil's proven oil reserves could more than double in volume terms.
102 
4.4.3.2  Regulatory framework 4.91.  The Brazilian Constitution confers to th e State exclusive rights over the exploration, 
production, refining, transportation, exportatio n, and importation of oil and gas and their 
derivatives. The ANP may,  on behalf of the State, grant authorizations and/or concessions for 
specific activities to private companies and consortia incorporated under Brazilian law, with 
headquarters and management in Brazil. This is applicable to the entire sector. Authorizations are 
necessary for the refining, liquefying, re-gasifying, processing, treating, transport, and stocking of 
fuels, and for activities related to the national distribution of fuels.
103 Besides creating the 
appropriate entities in Brazil, foreign companies must comply, inter alia , with technical-capacity 
and financial-standing requirements. 
4.92.  Brazil's main legislation with respect to the regulation of the hydrocarbons sectors 
comprises Law No. 9,478 of 6 August 1997; Law No. 12,276 of 30 June 2010; Law No. 12,304 
of 2 August 2010; and Law No. 12,351 of 23 December 2010. 
4.93.  In 2010, Brazil discontinued its exclusive us e of the concession regime for the exploration 
and production of oil and natural gas, regulate d by Law No. 9,478 of 6 August 1997. Two parallel 
regimes (transfer of rights and production-sharing) were introduced for selected exploration blocks 
(Table 4.8). Until discontinuation of the regime, the ANP held 10 bidding rounds for E&P of oil and natural gas on blocks. Any bidder, national or foreigner, who complied with the required qualifications, could participate, without exclusion for any area or block.  
                                               
99 PETROBRAS online information. Viewed at: http://fatosedados.blogspetrobras.com.br/2011/04/26/ 
preco-gasolina-litro-desde-2009/ and http://fatoseda dos.blogspetrobras.com.br/2011/10/28/reajuste-nos-
precos-de-gasolina-e-diesel/.   
100 The CIDE is applied on the impo rtation and commercialization of petroleum and natural gas, their 
derivatives, and ethanol. Its proceeds may be channelled to differe nt uses, including subsidies for fuel 
transportation. The CIDE rate on gasoline was reduce d to R$0.091 per litre in November 2011 and to zero 
in June 2012. 
101 Agencia Brasil online information. Viewed at : http://agenciabrasil.ebc.com.br/noticia/2011-10-
31/decreto-que-reduz-aliquota-da-cide -para-evitar-elevacao-de-precos-de-c ombustiveis-e-publicado-hoje and 
http://agenciabrasil.ebc.com.br/noticia/2012-06-22/petrobras-anuncia-aumento-da-gasolina-e-do-diesel-nas-refinarias-mas-preco-nao-sobe-nas-bombas. 
102 ANP online information. Viewed at: http://www.anp.gov.br/?pg=59301&m=reservas&t1=&t2= 
reservas &t3=&t4=&ar=0&ps=1&cachebust=1343380230569. 
103 The main requirements for authori zation are: not to be involved in any fiscal or judi cial procedures 
brought by the Government; to be registered to carry out the specific activity; to demonstrate adequate 
financial capacity to carry out the planned activity; and to have proper environmental and security licences. 
The ANP is in charge of analysing requ ests and, if necessary, carrying out in situ insp ections. When granted, 
authorizations are published. WT/TPR/S/283 • Brazil 
 
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  Table 4.8 Regulatory framework for o il and gas exploration and production  
 Transfer of rights regime Production-sharing 
regime Concession regime 
Legislation Law No. 12,276 of 30 June 2010. Law No. 12,351 of 
23 December 2010; Law No. 12,304 of 
2 August 2010. Law No. 9,478 of 
6 August 1997. 
Coverage Seven designated "pre-salt" blocks 
granted in September 2010. Blocks located in the "pre-
salt" polygona and strategic 
blocks; the CNPE may extend 
the list of blocks covered. All remaining blocks 
(98% of Brazil's 
sedimentary basins). 
Exclusive 
rights 
transferability Not transferable. Transferable upon MME 
authorization. Transferable upon ANP 
authorization. 
PETROBRAS 
participation 
in E&P 
contracts Holds exclusive rights for 
exploration and production, initially 
up to a total of 5 billion barrels of 
oil equivalent; once the 5 billion 
barrel limit is reached, blocks will 
be granted under the production-
sharing regime. The consortium administers 
50% of the project and the 
Federal Government the 
other 50%. The consortium's 
part is divided in two:  up to 
70% for private investors 
and at least 30% for 
PETROBRAS, who may 
compete on equal footing 
with private companies in 
bidding rounds to raise its 
participation. Possibility of 100% 
participation; competes 
on equal footing with 
private companies in 
bidding rounds. 
Federal 
Government participation in E&P 
contracts Not possible. Possible through specific 
fund created by law; may 
participate in investments. 
 PPSA represents the 
Government's interests in the Operational Committee 
as the PSC manager. Not possible. 
Private sector 
participation 
in E&P 
contracts Not possible. Winning bidders in E&P 
auctions can have up to 70% 
participation in the 
consortium's share. Winning bidders in E&P 
auctions may have up 
to 100% participation 
in a consortium. 
Local content Exploration phase: an overall 
minimum of 37%, with item-specific minimums between 5% and 85%; Development phase: an overall minimum of 55% to 65% (depending on the year production began), with item-specific minimums between 29% and 
100%. Thresholds to be defined. Exploration phase: 
37% to 80% overall, with item-specific minimums between 5% and 90%; Development phase: 55% to 85% overall, with item-specific minimums between 
10% and 100%.
b 
Government 
revenue from 
E&P contracts Signing bonus of R$74.8 billion; 
royalties for production of 
hydrocarbons (10% of gross 
revenues). Signing bonus; royalties. Signing bonus; 
royalties for production 
of hydrocarbons (5% 
to 10% of gross 
revenues, depending 
on the concession 
contract); "special 
participation" fee on 
large/very profitable 
blocks (10-40% of net 
income). 
a The geographical coordinates of the "pre-salt polygon" are defined in the Annex to Law No. 12,351. 
b Figures from the latest bidding round (round 9) th at auctioned both onshor e and offshore blocks.  
Source: Information provided by the Brazilian authorities. 
4.94.  The production-sharing regime is regulated by Law No. 12,304 of 2 August 2010 and Law 
No. 12,351 of 23 December 2010. According to the authorities, adoption of the production-sharing 
model reflects the low exploration risk of the corresponding blocks, as well as the rise in oil prices WT/TPR/S/283 • Brazil 
 
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  relative to their levels when the concession model was originally implemented (1997).104 This 
regime is also aimed at achieving greater state control over oil production and a more equal distribution of its proceeds among Brazilians. To this end, government revenues arising from production-sharing contracts are to be channelled to a social fund to finance education, poverty 
reduction, and environmental initiatives.
105 
4.95.  In 2010, besides introducing the production-sharing regime, the Federal Government 
introduced a transfer of rights regime, through Law No. 12,276 of 30 June 2010. This law granted 
to PETROBRAS an area with 5 billion barrels of oil equivalent in exchange for more shares of the 
company. In September 2010, new shares were issued in order to further capitalize the company, and the Federal Government and other state bodies increased their share ownership from 39.8% to 47.7%. Brazil's probable oil and gas reserves located in the pre-salt polygon, including the 
seven blocks under the transfer of rights regime, are estimated at 15 to 35.1 billion barrels of oil 
equivalent. 
4.96.  Along with the adoption of the production-sharing regime, the Government created a state-
owned enterprise, Pré-sal Petróleo S.A. (PPSA)
106, to represent its interests in the consortia 
performing E&P operations and to manage the commercialization of the state's share of output produced.
107 The company may also act as an arbiter in cases where pre-salt and strategic 
reserves extend into blocks licenced  under a different regulatory regime.108 Unlike for PETROBRAS, 
the capital stock of PPSA must be enti rely owned by the Federal Government. 
4.97.  Under the production-sharing regime, the Federal Government administers 50% of a project 
and a consortium the remaining 50%. Private-sector participation in a consortium is limited 
to 70%, to be offered in bidding rounds; the first such round is yet to be scheduled.109 
In March 2013, the authorities indicated that the first bidding round may take place in November 2013, but the areas were still to be defined. Any winner of a bid must establish a 
consortium with PETROBRAS, in which the state company has at least 30% participation. 
PETROBRAS may also bid on an equal footing to private companies with a view to increasing its participating interest in a production-sharing contract. The production-sharing regime does not 
exclude the possibility of direct contracts with PE TROBRAS, without bidding procedures, in order to 
preserve national interests or achieve other energy policy goals. The selection of winning bids is to 
be based on the portion of hydrocarbon output ( excedente em óleo ) to be shared between the 
Government and the contractor, after deducting a percentage of the total production volume to 
cover royalties and costs incurred by the contractor.  
4.98.  Under the concession regime in place since August 1997, and regulated by Law No. 9,478 of 
6 August 1997, the ANP has the authority to carry out bidding rounds for the concession of blocks 
for E&P activities. Since 1999, the ANP has granted concessions in nine such rounds, the most 
recent of which was completed in June 2009.
110 At end 2011, 61 foreign and domestic 
concessionaries were conducting E&P activities in Brazil; explorations were under way 
                                               
104 Federal Government online info rmation. Viewed at: http://www.b rasil.gov.br/energia-en/pre-salt/ 
contractual-arrangements/br_model1?set_language=en. 
105 Article 46 of Law No. 12,351 of 23 December 2010. 
106 Law No. 12,304 of 2 August 2010. 
107 PPSA is not responsible for carrying out, directly or  indirectly, exploration, development, production, 
or commercialization activities. Its re sponsibilities for the management of  production-sharing contracts are, 
inter alia , to: defend the interests of the State in consorti a and their respective oper ations committees; carry 
out technical and economic evaluati ons of exploration, development and production plans, and enforce 
contractual requirements relating to local content; monitor and audit the implementation of exploration, appraisal, development and production  projects; monitor and au dit costs and investments related to production 
sharing contracts. For the management of commercialization contracts, PPSA may: enter into such contracts on 
behalf of the State; verify contractors' compliance wi th the commercialization policy for the State share of 
output derived under production-sharing contracts; and monitor vending operations, sale costs, and prices of 
for oil, natural gas, and other hydrocarbon fluids. 
108 Article 4 of Law No. 12,304 of 2 August 2010, and Federal Government online information. Viewed 
at:  http://www.brasil.gov.br/energia-en/pre-salt/contractual-arrangements/br_model1?set_language=en. 
109 Federal Government online in formation. Viewed at : http://www.brasil.gov.br/energia-en/pre-
salt/contractual-arrangements/br_model1?set_language=en. 
110 The eleventh bidding round, originally schedule d for September 2011, wa s postponed until further 
notice. WT/TPR/S/283 • Brazil 
 
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  at 324 blocks, of which 92 were being explored by PETROBRAS and 94 by consortia with 
PETROBRAS participation.111  
4.99.  Local-content commitments have been among the selection criteria in all concession rounds 
carried out to date. Since October 2005, the ANP has set item-specific minimum local-content 
thresholds for bidders' overall local-content offers (Table 4.8). Since November 2007, 
concessionaries are required to present to the ANP certificates of local content issued by accredited institutions.
112 Concessionaries that fail to fulfill their local-content commitments are subject to 
fines, which vary according to the shortfall. In 2011, the ANP levied fines totaling R$59 million to 
nine companies, including PETROBRAS, for not meeting their respective local-content commitments made in the fifth and sixth bidding rounds.
113 
4.100.  The transfer of rights regime stipulates local-content requirements under conditions similar 
to those of the concession regime; the relevant items and thresholds may differ. Activities under 
production-sharing contracts are also subject to local-content requirements, as well as to the payment of signature bonuses and royalties. Law No. 12,734 of 30 November 2012 introduced a 
royalty of 15% of gross revenues for production-sharing contracts. The production-sharing 
contracts are not subject to special participation fees.  
4.101.  In its acquisitions related to E&P projects, PETROBRAS has traditionally set a minimum 
local-content threshold for goods and services delivered by its Brazil-based suppliers. To this end, 
it has applied the ANP methodology for the calculation of local content. In 2011, PETROBRAS elaborated an internal local-content policy, which extended the same practice to other areas of operation.
114  
4.102.  Concessionaries are eligible for a Special Customs Regime (REPETRO)115, which suspends 
the application of all federal and state taxes on specific equipment and spare parts imported for direct use in E&P activities.
116 The REPETRO also allows for the "fictitious exportation" and 
subsequent importation, under the temporary ad mission customs regime, of goods produced in 
Brazil and sold in foreign currency to an entity domiciled abroad for use in the exploration of petroleum and natural gas in Brazil (Chapter 3.4.2.7).
117 The list of eligible goods was modified 
in 2008 to include, inter alia , equipment and tools intended for rescue, accident prevention, fire 
fighting, and protection of the environment.118 The regime waives all import taxes until 
31 December 2020. The REPETRO may be applied to E& P activities under the transfer of rights and 
production-sharing regimes. 
4.103.  The Special Incentive Regime (REPENEC) suspends all federal taxes on imported or 
domestically acquired machinery, equipment, and construction materials intended for infrastructure work in: petrochemicals, oil refining, and ammonia and urea production from gas.
119 
Eligible projects must be located in the north, north-east and mid-west regions; the suspension of 
import tariffs on construction assets and inputs is conditional upon no similar national products being in existence. Federal tax suspension is converted into zero-rate duty upon proof that the 
inputs were used in accordance with Article 3 of Law 12.249 of 11 June 2010, which established 
the REPENEC. 
4.104.  In 2009, Brazil adopted a new Gas Law ( Lei do Gás )
120 that introduces the possibility of 
tendering for concessions in specific cases, including transportation via newly built pipelines 
                                               
111 ANP (2012). 
112 ANP Resolution No. 36 of 13 November 2007. 
113 The fines were levied on ten companies: PETROB RAS, Shell, Sonangol-Sta rfish, Statoil, Maersk, 
Petrogal, Partex, Petroxyner gy, Quantra and Aurizônia. 
114 PETROBRAS (2012). 
115 Law No. 9,478 of 6 August 1997 and Decree No. 3,161 of 26 September 1999. 
116 Admission to the REPETRO is reserved for legal en tities authorized by the Secretariat of Federal 
Revenue of Brazil (RFB). 
117 Inputs used in domestic manufacture of goods elig ible for "fictitious export ation" under the REPETRO 
may be imported under the drawback regime. 
118 RBF Normative Ruling No. 844 of 9 May 2008. Available at: http://www.regimerepetro.com.br/ 
documentos/legislacao/IN_RFB_844.pdf. 
119 Law No. 12,249 of 11 June 2010. 
120 Law No. 11,909 of 4 March 2009. WT/TPR/S/283 • Brazil 
 
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  considered of "general interest"121, and storage in hydrocarbon reservoirs returned to the State. 
Concessions for transportation of natural gas are granted for a period of 30 years; they are transferable and renewable for a maximum of 30 additional years. Prospective operators' bids are assessed on the basis of the lower annual servic e fee sought and, where applicable, the payment 
offered for use of auxiliary facilities belonging to  the State. The duration of the concession for 
storage activities is not established by law, but the MME, after consulting with the ANP, may establish a period of exclusivity for the company whose contracted capacity enabled or helped to 
enable the construction/operation of a storage facility. 
4.105.  Distribution and commercialization transactions involving natural gas, other than state-
level distribution, are subject to registration with the ANP; details on the origin and characteristics of the contracted natural gas volumes may be requested. The Gas Law authorizes private entities 
to build customized distribution facilities if the distribution operator of the respective State cannot 
respond to their specific needs.
122 Ownership of any such infrastructure must be transferred 
(against compensation) to the State; its operation and maintenance must be entrusted to the 
state distribution operator. 
4.4.3.3  Biofuels  4.106.  During the review period, Brazil retained its position as the second-largest producer of 
ethanol in the world.
123 However, in 2011, the United States overtook Brazil as the world's largest 
exporter of ethanol. After reaching a historic hi gh of 5.1 million cubic meters in 2008, Brazilian 
ethanol exports dropped to 2.5 million cubic mete rs in 2012, partly due to unfavourable weather 
conditions and rising international prices of sugar, which encouraged a production switch at the 
expense of ethanol.124  
4.107.  In April 2010, Brazil reduced its import tariff on ethanol from 20% to 0%.125 Moreover, 
in October 2011, in an attempt to curb domestic demand in the light of lower production levels, 
the Brazilian Government reduced the blending ra tio of ethanol in gasoline from 25% to 20%.126 
Nonetheless, the average retail price for ethanol in 2011 reached a high of R$1.8 per litre.127 The 
authorities indicated that the price of ethano l is expected to decline with the April 2013–
March 2014 sugarcane harvest. 
4.108.  In 2012, the BNDES launched two new programme s offering credit to the ethanol sector at 
attractive conditions.  The BNDES PRORENOVA programme grants credit to sugarcane producers totalling up to R$4,350 per hectare planted. The programme was scheduled to be in force until 
31 December 2012, with a total budget of R$4 billion.
128 The BNDES PASS programme finances 
the storage of ethanol, offering up to R$50 million per beneficiary. The programme, with a total budget of R$2.5 billion, was set to expire in 28 February 2013.
129  
4.109.  Since 2011, the BNDES has also financed innovation in sugarcane biomass technology 
through PAISS, a programme run in partnership with the state-owned company Financiadora de 
Estudos e Projetos  (FINEP). Between 2011 and 2014, PAISS may disburse up to R$1 billion in the 
                                               
121 This regime does not apply to natural gas pi pelines covered by international treaties; an 
authorization regime, administered by  the ANP, applies in this case. 
122 Under the Constitution, the states  forming the Brazilian Federation have exclusive rights over the 
local distribution and sale of piped natural gas; concessions for these activities are regulated and  granted at 
sub-federal level. 
123 US Department of Energy onli ne information. Viewed at: http ://www.afdc.energy.gov/data/#tab/ 
fuels-infrastructure/data_set/10331. 
124 Brazilian ethanol production comes entirely from sugarcane (ANP, 2012). 
125 MDIC online information. View ed at: http://www.mdic.gov.br/sitio/interna/noticia.php?area=1& 
noticia=9708. The authorities indicated that the reduction was consistent with the objective of removing all tariff and non-tariff barriers to the international trade of ethanol. 
126 Agencia Brasil online information. Viewed at : http://agenciabrasil.ebc.com.br/noticia/2011-08-
29/governo-reduz-percentual-de-etanol-que-e-misturado-gasolina. 
127 ANP (2012). 
128 BNDES online information. Viewed at: http ://www.bndes.gov.br/Site BNDES/bndes/bndes_pt/ 
Institucional/Apoio_Financeiro/Pro gramas_e_Fundos/prorenova.html. 
129 BNDES online information. Viewed at: http ://www.bndes.gov.br/Site BNDES/bndes/bndes_pt/ 
Institucional/Apoio_Financeiro /Programas_e_Fundos/pass.html. WT/TPR/S/283 • Brazil 
 
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  form of credit instruments, equity participation, and economic support.130 The PAISS programme is 
focused in developing new technologies for second-generation biofuels and better use of biomass as a source of clean energy. 
4.110.  Brazil has also put in place mechanisms to promote domestic demand and supply of 
biodiesel. In the framework of the National Programme for Biodiesel Use and Production (PNPB), in 
force since 2004, Brazil increased the mandatory biodiesel blending ratio to 5% as from January 2010, three years ahead of schedule.
131 Since 2005, the ANP has hold "reverse auctions" 
for domestically produced biodiesel, setting the volume of government purchases and a maximum 
price that suppliers must underbid.  Until August 2012, bids took place every three months, since then bids take place every two months. The entire volume auctioned is bought by PETROBRAS, which resells the product to distribution comp anies. Between 2008 and 2012, 10.5 million cubic 
meters of biodiesel were purchased through reverse auctions.
132 Under the auction rules, at least 
80% of the total volume purchased must come from producers certified by the "Social Fuel Seal".
133 To obtain this certification, biodiesel producers must purchase a minimum share of raw 
materials from family farmers registered under the PRONAF (Chapter 4.2). Minimum shares differ 
by region: 15% in the north and mid-west; 30% in the south-east, north-east and the semiarid area; and 35% in the South. 
4.111.  The reverse auction mechanism was originally conceived as a transitional support measure 
for the biodiesel production chain, to be abandoned once the market is consolidated. However, a later assessment of the biodiesel market led the authorities to extend the reverse-auction mechanism, since they considered it to be an efficient way to guarantee the participation of small 
farmers in the biodiesel production chain. The interagency commission that oversees the 
implementation of the biodiesel programme is considering a change in the law, to establish a minimum volume to be purchased from producers ce rtified with the "Social Fuel Seal", which will 
pave the way for transitioning away from the auctions. Until the new law is approved, auctions will 
continue. In May 2012, following allegations of price agreements between biodiesel producers, the ANP announced new auction rules to prevent the formation of cartels.
134 The Federal Police 
initiated an investigation on the matter.135  
4.112.  National biodiesel production reached 2.7 million cubic meters in 2011, up from 69 million 
in 2006. Brazil is a major world market for biodiesel, together with the United States and Germany. PETROBRAS is the largest producer, accounting for about one quarter of national 
biodiesel output.
136 According to MME information, the PNPB helped reduce imports of conventional 
diesel by some US$5.3 billion over 2004-11.137  
                                               
130 BNDES online information. View ed at: http://www.bndes.gov.br/ SiteBNDES/bndes/bndes_pt/Areas_ 
de_Atuacao/Inovacao/paiss/. 
131 The PNPB is regulated by Law No. 11,097 of 13 January 2005. 
132 Until mid-2012, the MME usually set the volume of purchases, considering short-term diesel demand 
perspectives. However, as from the second half of 2012, auctions’ rules were improved in order to foster greater competition among biodiesel producers and improve the relationship between producers and 
distribution companies. The main featur e in this new auction model is that buyers are no longer passive in the 
process of selection of the best deals. They choose plan ts according to their needs and in consultation with 
their clients (distribution companies), who also participate actively in the process. In the new model, the volume is no longer set by the MME , but is exclusively a purchaser decision. The ANP only sets a maximum 
price, which suppliers must underbid for each region, based on productions costs. 
133 MME online information. Viewed at: http://www. mme.gov.br/programas/biodiesel/menu/biodiesel/ 
pnpb.html. 
134 Agência Brasil Online information. Viewed at: http://agenciabrasil.ebc.com.br/noticia/2012-05-
11/modelo-de-leiloes-para-aquisicao-de-biodiesel-muda-para-evitar-combinacao-de-precos. 
135 Folha de São Paulo online information. View ed at: http://www1.folha.uol.com.br/mercado/1086268-
policia-federal-investiga-fraude-em-venda-de-biodiesel.shtml. 
136 PETROBRAS online information. Viewed at: http://www.petrobras.com.br/pt/noticias/investiremos-
us-2-5-bi-em-biocombustiveis-ate-2015/. 
137 MME online information. Viewed at: http://www. mme.gov.br/programas/biodiesel/menu/biodiesel/ 
pnpb.html. WT/TPR/S/283 • Brazil 
 
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  4.4.4  Electricity 
4.4.4.1  Market features 4.113.  Between 2008 and 2011, Brazil's installe d capacity and power generation output grew 
faster than electricity consumption. In 2011, Brazil had 117 GW of installed capacity for electricity 
generation, generated 532 TWh of electricity, and consumed 480 TWh; these figures represented 
increases of 13%, 15%; and 12%, respectively from 2008 levels. Hydroelectric sources accounted for over 70.4% of installed capacity, followed by thermal (26.7%), nuclear (1.7%), and wind 
(1.2%) sources. Brazil's electricity imports in 2011 accounted for 6.8% of domestic supply, down 
from 8.5% in 2008.
138 Electricity produced in Itaipu and imported from Paraguay accounts for 
most of Brazil's imports.139 In 2011, Brazil imported 37.725 GWh from Paraguay and 705 GWh 
from Venezuela, and exported 2.338 GWh to Argentina and 206 GWh to Uruguay. 
4.114.  The Federal Government owns 54.46% of voting shares in ELETROBRAS, which continues 
to play a major role in the electricity sector. In 2010, the company accounted for 36% of Brazil's installed generation capacity, as well as 55% of its transmission lines.
140 Private investors, mostly 
foreign, hold roughly 35% of the company's total capital stock.141 Electricity distribution is 
provided by 64 companies, including state- and privately-owned enterprises.142 
4.115.  After rising by more than 35% between 2003 and 2007, electricity prices have stabilized 
and increased well below inflation rates. During 2007-10, the average price for electricity rose by 
just 3% to reach R$264 per MWh143; over the same period, cumulative inflation was 20.6%.144 
Nevertheless, Brazilian consumers continue to pay a relatively high price for electricity. According to a survey of 27 countries conducted by the Federati on of Industries of the State of Rio de Janeiro 
(FIRJAN), Brazil had the fourth highest electricity price for industrial consumers
145; some 48.6% of 
that price was attributable to federal and state-level taxes (PIS/COFINS and ICMS), as well as to sector-specific charges.
146 In 2013, the sector's regulator introduced new tariffs, which are 
estimated to have led to a 20.2% reduction in energy prices.  For households, the minimum 
reduction will be of 18%, while tariffs for high-int ensity consumers could be up to 32% lower.  The 
reductions have resulted from the adoption of Law No. 12,783 of 11 January 2013, which 
established the renewal of generation and transmi ssion concessions due to expire by 2017, as well 
as the enactment of Provisional Measures No. 591/2012 and 605/2013.  The main measures introduced by Law No. 12,793/13 which allowed a reduction in energy prices include: a) the establishment of an average energy price of  R$32.81/MWh for energy quotas provided by 
generators with renewed concessions; b) reductions of transmission prices; c) lower federal 
sector-specific taxes; and d) higher National Treasury direct contributions. 
4.4.5  Regulatory framework 
4.116.  The electricity sector was reorganized in early 2004 under a new model.
147 The 
institutional framework comprises: the MME and the CNPE, the main decision-making bodies; the regulatory agency (ANEEL); the Accredited Sectoral Standardization Bodies (ONS), which 
coordinate and control the National Integrated Gr id (SIN); the Energy Research Enterprise (EPE), 
established to conduct studies to inform energy policy-making; the Electric Energy Commercialization Chamber (CCEE), a non-profit private entity that manages electricity trading; and the Electricity Industry Monitoring Committee (CMSE), which monitors the continuity and 
safety of electricity supply. 
                                               
138 EPE (2012). 
139 Itaipu is jointly administered by  Brazil and Paraguay; each country ha s rights on half of its capacity. 
140 ELETROBRAS online information. Viewed at: h ttp://www.eletrobras.com/elb/data/Pages/LUMIS59 
BAE5EBITEMIDPTBRIE.htm. 
141 ELETROBRÁS (2010). 
142 ANEEL online information. Viewed at: http: //www.aneel.gov.br/area.cfm?idArea=48&idPerfil=2. 
143 ANEEL Online information. Viewed at: h ttp://www.aneel.gov.br/area.cfm?id_area=91. 
144 Brazilian Central Bank online information. Viewed at: http://www.bcb.gov.br/Pec/metas/ 
TabelaMetaseResultados.pdf. 
145 FIRJAN (2011). 
146 The sector-specific charges finance a variety of programmes, including for cross-subsidization of 
regions and consumers, safety of the electricity system, research and development, alternative energy 
sources, and energy conservation. These charges are incorporated in the end-user electricity tariffs. 
147 WTO document WT/TPR/S/140, 1 November 2004. WT/TPR/S/283 • Brazil 
 
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  4.117.  The ANEEL grants concessions for electricity generation, transmission, and distribution 
through authorizations or public tender procedures; the latter may involve auctions, which are organized by the ANEEL or the CCEE.
148 Setting-up thermoelectric plants with a capacity of more 
than 5 MW requires ANEEL authorization; the same applies to hydroelectric plants with a capacity 
greater than 1 MW but equal to or lower than 50 MW.149 Hydroelectric projects with capacity 
greater than 50 MW require public-provider concessions in order to trade part of their electricity via auctions. Authorizations for building and operating new thermoelectric generators and certain 
hydropower plants are granted for 30 years, no n-renewable. A renewable period of 35 years is 
envisaged for new hydroelectric generators. Conce ssions for building hydropower plants greater 
than 50MW are granted for 35 years, non renewable. 
4.118.  Under the regime applicable until January 2013, generation concessions granted before 
11 December 2003 lasted for up to 35 years and could be extended for up to 20 years. 
Concessions awarded after that date also lasted for up to 35 years, but could no longer be extended.
150 Distribution and transmission concessions were for up to 30 years, with the possibility 
of extension for the same period.151 All this changed with Law No. 12,783 of 11 January 2013 (see 
below). As of the first semester of 2010, the ANEEL had awarded concessions through tender procedures for almost 39,000 km of transmission lines, attracting investments of some 
R$31.5 billion, from national and foreign investors.
152 A large number of concession contracts, 
comprising 58 generating plants, 78,000 km of tran smission lines, and 41 distribution companies, 
are due to expire between 2015 and 2017. 
4.119.  Brazil's electricity model is organized around two trading environments: the Regulated 
Contracting Environment (ACR) and the Free Contracting Environment (ACL). In the ACR, 
distribution companies hold the exclusive right to  supply electricity to captive consumers. These 
companies may not operate in the ACL, where large consumers (above 3MW/year)  may purchase 
energy from generating or trading companies through freely negotiated bilateral contracts.153 As a 
general rule, generating companies may sell electricity in both environments; however, those registered as self-producers (i.e. generating en ergy for their own consumption) may sell their 
surplus electricity only to distribution companies in the ACR, under a transaction-specific 
authorization from the ANEEL.
154 In August 2012, the size of the ACL market was estimated at 
27.2% of domestic electricity consumption, with 1,427 entities registered as free consumers at the CCEE.
155 
4.120.  Public auctions are the main procurement mechanism for distribution companies to acquire 
energy from generating companies. Under auction rules, all distribution companies buy energy at 
the same price.156 The tariffs charged to the final consumer are regulated by the ANEEL and vary 
depending on operational and other costs incurred by the distribution company. Between 2004 
and 2010, a total of 31 energy purchase auctions were conducted. Up to April 2010, some 57,000 MW of new capacity were contracted by distribution companies, with contracts ranging 
from 15 to 30 years.
157 Imports and exports of electricity may only take place through the national 
grid (SIN) and require ANEEL authorization; they may take place under free contracts or in the regulated market. Authorizations are non-automatic and are granted through the integrated foreign trade system SISCOMEX (Chapter 3.2).
158 
                                               
148 ANEEL may delegate its responsibility for conducting energy auctions to the CCEE. 
149 Thermoelectric and hydroelectric power plants with generation capacities of up to 5MW and 1MW, 
respectively, need only be  registered with ANEEL. 
150 Law No. 10,848 of 15 March 2004. 
151 Law No. 9,047 of 7 July 1995. 
152 ANEEL online information. View ed at: http://www.aneel.gov.br/area.cfm?idArea=54&idPerfil=5 and 
http://www.aneel.gov.br/area.cfm?id_area=57.    
153 Since 2006, consumers that demand over 500kW/year and have the ability to purchase energy from 
alternative sources may also participate in the ACL. 
154 Decree No. 5,163 of 30 July 2004. 
155 CCEE online information.  Viewed at:  ht tp://www.ccee.org.br/portal /faces/pages_publico. 
156 The price is set by auction.  Gene rators must offer quotas of energy to be sold at decreasing prices 
until the sum of the quotas equals total demand by the distributors.  At this point, an average price for all quotas offered is calculated;  this price is the single price to be paid by all dist ribution companies in their 
purchases of quotas. 
157 World Bank (2011). 
158 SRF Normative Instruction No. 649 of 28 April 2006. WT/TPR/S/283 • Brazil 
 
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  4.121.  The regulatory framework of the electricity sector was revamped in early 2013, with the 
passage of Law No. 12,783 of 11 January 2013. Th is law, which now regulates electricity 
generation, transmission, and distribution concessions, modified Laws No. 9,427 of 26 December 1996; 9, 648 of 27 May 1998; 10, 438 of 26 April 2002; 10, 848 of 15 March 2004; 
and 12,111 of 9 December 2009; and repealed Law No. 8,631 of 4 March 1993. The law extended 
the regime of concessions for electricity generation and the system of quotas, indicating that as from 12 September 2012, the generation concession s of hydropower granted under Article 19 of 
Law No. 9,074 of 7 July 1995 may be extended at the discretion of the Government, only once, for 
up to 30 years, in order to ensure the continuity  and efficiency of the service provided as well as 
low electricity tariffs. The extension is contingent upon the generator's acceptance of certain conditions to be set by the ANEEL, including the re muneration tariffs to be applied, a guaranteed 
supply quota allocation, and quality standards. Quotas will be allocated through contracts and they 
are expected to be revised periodically by ANEEL.  
4.122.  The new law also applies to auto generation: hydroelectric generation concessions with 
power of up to 50 MW may be extended once for up to 30 years. Generators may sell any non-
consumed surplus in the spot market. Generators not linked to the SIN are not bound by the 50MW threshold. 
4.123.  In the case of thermo-electric power generation, Law No. 12,783 allows the renewal of 
concessions for up to 20 years. The renewal must be requested by the concessionary at least 24 months prior to the expiration of the concession. 
4.124.  Concessions for transmission and distribution  of electricity are also allowed to be extended 
once for up to 30 years as of 12 September 2012 . In the case of transmission, revenue will be 
fixed by ANEEL. The generation, transmission, and distribution of electrical energy concessions 
that are not renewed, will be granted in a competitive auction, for up to 30 years. 
4.125.  The 2013 Law also authorized the Federal Government to acquire the claims held be 
ELETROBRAS in Itaipu, and grant them to the Energy Development Fund (CDE), created by Law No. 10,438 of 26 April 2002. The Law allowed for th e transfer of the Global Reversion Reserve 
(RGR) resources to the CDE.
159 The CDE’s role was redefined to: promote the development of 
energy in the Brazilian states, while promoting the universality of electrical energy service in the 
whole Brazilian territory, the competitiveness of energy produced from sources such as wind, photovoltaics, solar, small hydro power plants, bi omass, other renewable sources, and natural gas, 
and guaranteeing the resources needed to provide subsidies for low-income consumers. The CDE 
is financed through annual fees paid by all agents commercializing electric energy, fees paid for the use of the distribution and transmission systems, fines paid to ANEEL, and Federal 
Government credits. The CDE is managed by ELETROBRAS.  
4.126.  Notwithstanding the encouraging developments in the electricity sector, including price 
stability and growing generation capacity, Brazil continued to experience power failures during 
2009-12. In November 2009, a major blackout affected 18 Brazilian states, leaving consumers 
without electricity for nearly four hours, on average.
160 Following investigations, ANEEL applied 
fines totalling some R$46 million to six companies for failures in the operation and maintenance of transmission lines.
161  
4.127.  The Light for Everyone ( Luz Para Todos ) programme, aimed at promoting universal access 
to electricity, has been in operation since 2003. As of May 2009, the programme had brought electricity to 10 million households in remote areas. Originally intended to terminate in 2011, the 
programme was extended to 2014, after the 2010 Census revealed that 2.2% of the Brazilian 
                                               
159 The CDE is authorized to contract credit operat ions, in order to cover any need to compensate 
electricity concessionaries in case of reversion of conces sions, or to limit tariff increases. The RGR was created 
by Law No. 5,655, of 20 May 1971, and had functions similar to the CDE's. 
160 Brazilian Chamber of Deputies News Agency online in formation. Viewed at : http://www2.camara. 
gov.br/agencia/noticias/ECONOMIA/144188-GOVERNO- INSISTE-QUE-A-CAUSA-DO-APAGAO-EM-NOVEMBRO-
FOI-O-MAU-TEMPO.html. 
161 ANEEL online information. Viewed at: http://www.aneel.gov.br/aplicacoes/noticias/Output_Noticias. 
cfm?Identidade=4303&id_area=90. WT/TPR/S/283 • Brazil 
 
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  population did not have access to electricity.162 The Government also offers subsidized electricity 
tariffs to low-income families, with  discounts ranging from 10% to 100%.163 
4.5  Services 4.5.1  Banking, finance, and insurance 
4.5.1.1  Overview 
4.128.  The degree of financial intermediation in Brazil increased during the period under review. 
The authorities indicated that macroeconomic stability has contributed directly to financial 
inclusion, which the Government has promoted by, inter alia,  improving distribution channels, 
increasing transparency, and adapting the regulation of financial services for low-income customers. As a result, all 5,565 Brazilian munici palities are currently served by the financial 
system, and the number of individuals with an active relationship with financial institutions 
grew 31% to 121 million between 2007 and 2012. There has been a substantial increase in the 
credit to GDP ratio, from 25% in 2003 to more than 50% in 2012. This has been a useful step towards correcting the insufficient supply of medium and long-term private credit for small and 
medium-size enterprises, identified in the last Revi ew of Brazil. However, the role of state banks in 
medium- and long-term financing remains very important, directly or through equalization initiatives, by which a portion of the interest rate charged to credit users is taken up by the State.  
4.129.  The decline in interest rate spreads has played an important role in increasing financial 
deepening. The average interest rate spread consid ering the credit portfolio as a whole dropped by 
almost 10 percentage points during the period un der review. However, while average interest rate 
spreads were reduced, they remain wide, at over 24 percentage points in 2012.  
4.130.  The establishment of new foreign financial institutions requires approval by Presidential 
Decree. In practice, the establishment of new foreign financial institutions has been allowed, and 17% of assets are in the hands of foreign banks. Brazil participated in the WTO negotiations 
on financial services; although it has not ratified the Fifth Protocol, amendments made to its 
insurance legislation in 2007 may make this possible. Among other things, the amendments allow, under certain conditions, the cross-border supply of insurance services, which was previously 
forbidden. 
4.131.  In 2012, Brazil’s financial sector was subjected to the IMF and the World Bank Financial 
Sector Assessment Program (FSAP). The FSAP found that from 2002 to 2012, Brazil’s financial system had "grown in size, diversification and sophistication, hand in hand with the country’s 
economic progress": financial sector assets had doubled, driven by macroeconomic stabilization, 
and there had been significant gains in financial inclusion, while securities and derivatives markets had expanded. It was noted that financial sector oversight and infrastructures were strong, but 
there was room for improvement in some areas to stay ahead of the rapidly evolving system. Due 
to appropriate policy responses and built-in financial-system buffers, the financial system had weathered the global crisis remarkably well.
164 The FSAP report also noted that the banking sector 
remained dominated by domestic financial institutions, with public banks having a significant 
share, while international investors had important roles in the capital and derivatives markets. The 
FSAP report noted that, although systemic risk is currently low, the Brazilian financial system 
operates in a challenging environment, and recommended that policies be geared toward 
encouraging the development of private long-term finance. The report also noted that: "interest 
rates are well above those in comparable countries, most debt instruments are indexed to the overnight interest rate, and domestic investments are concentrated in short-term or indexed 
instruments", and that this  limits capital market development and potential growth. Further 
                                               
162 MME online information. Viewed at: http:// luzparatodos.mme.gov.br/luzparatodos/Asp/o_ 
programa.asp. 
163 MDS online information. Viewed at: http://w ww.mds.gov.br/falemds/perguntas-frequentes/bolsa-
familia/programas-complem entares/beneficiario/tarifa-social-de-energia. 
164 Among the measures applied, the following are ment ioned: fiscal and moneta ry stimulus, the latter 
mainly through significant release of ba nk reserves to preserve market liqui dity; a quasi-fiscal  stimulus through 
the national development bank (BNDES ); other public banks expanding lend ing; foreign exchan ge intervention; 
and measures to channel liquidity to small an d medium-sized banks facing stress (IMF, 2012). WT/TPR/S/283 • Brazil 
 
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  progress requires promoting the development of longer-term private finance, maintaining 
macroeconomic stability, and improving the business environment.165 
4.5.1.2  Main features 4.132.  Financial intermediation and insurance accounted for 6.1% of GDP in 2012, down from 
6.6% in 2007.
166 Financial services grew 3.9% in 2011, below the 7.2% average growth obtained 
from 2009 to 2011. Brazil ran a trade surplus for financial services in 2010, 2011, and 2012 (of US$0.4 billion, US$0.861 billion, and US$0.71 billion, respectively). The insurance balance, 
however, ran deficits of US$1.1 billion, US$1.2 billion, and US$1 billion, respectively.  
4.133.  There were 1,866 financial institutions in Brazil in December 2012
167, while, in total, 
2,088 institutions were supervised by the Central Bank.168 Assets in the Brazilian financial system 
totalled R$5.06 trillion in November 2012, some 115% of GDP. Credit cooperatives and other non-
bank financial institutions hold less than 1% of the assets.  
4.134.  Apart from the above-mentioned institutions, the Brazilian financial system (SFN) 
comprises 118 insurance companies, 19 capitaliz ation (investment plan) companies, 25 open 
pension fund societies, 12 local reinsurers, and 29 admitted reinsurers. This is an increase of 
around 11% over the number of institutions operating in December 2009.169 Insurance industry 
assets totalled R$461.7 billion in December 2012. 
4.135.  The main regulators of the SFN are the National Monetary Council (CMN) and the National 
Council of Private Insurance (CNSP), presided over by the Minister of Finance. The CMN was created by Law No. 4,595/64, to set policies and regulations for financial institutions, following recommendations from the regulatory institutions, such as the Central Bank of Brazil, the Brazilian 
Securities Exchange Commission (CVM), and the Superintendence of Private Insurance (SUSEP). 
Resolutions by the CMN apply to all SFN institutions.  
4.136.  The Central Bank authorizes financial institutions, and supervises deposit-taking financial 
institutions, other financial institutions, financial intermediaries, and auxiliary institutions. The 
Central Bank and the CVM concurrently supervis e securities brokers and dealers, investment 
brokers, foreign investor portfolios, and the clearing and settlement system. The CVM supervises 
stock and futures exchanges, mutual funds, securi ties issuers, portfolio managers, broker/dealers, 
and individuals operating in the securities markets.  The Central Bank supervises prudential aspects 
and financial operations, and the CVM capital market operations. 
4.137.  The Superintendence of Private Insurance (SUSEP) supervises insurance, capitalization 
(investment plans), open private pension funds, reinsurance operations, and the licensed brokers. 
The SUSEP supervises both prudential and conduct issues of these industries.  
4.138.  The National Complementary Welfare Superintendence (PREVIC),  under the Ministry of 
Social Security, supervises closed entities offering complementary pensions. The National 
Regulatory Agency for Private Health Insurance an d Plans (ANS), under the Ministry of Health, is 
responsible for supervising the health insurance business. 
4.139.  Conditions for the participation of foreign capital in financial institutions remain unmodified 
since the last Review of Brazil. Under Article 192 of the Federal Constitution and Article 52 of the 
                                               
165 IMF (2012). 
166 As measured by the IBGE. 
167 The financial system comprises:  multiple banks (137), commercial banks (22), development 
banks (4), savings banks (1), investment banks (14), exchange banks (2), consumer finance companies (CFI, 
58), security brokerage companies (CTVM, 94), exchange brokerage companies (CC, 57), security distribution 
companies (DTVM, 118), leasing companies (SAM, 30), re al estate credit companies and savings and loans 
associations (SCI & APE, 12), mortgage companies (CH, 7), development agencies (16), credit unions (1,254), 
and micro-financing institutions (SCM, 40). Central Bank  online information at: http://www.bcb.gov.br/htms/ 
deorf-i/d201301/Chart%2001%20-%20Quantity% 20of%20institutions%20by%20type.pdf. 
168 Total supervised institutions comprise the SFN plus consortium management companies (222), which 
are not considered financial institutio ns, despite the fact that the Centra l Bank regulates and supervise them. 
169 In December 2009, the insurance market comprised: 114 insurance companies, 17 capitalization 
(investment plan) companies, 28 open pension fund societies, 6 local rein surers, and 21 admitted reinsures. 
SUSEP online information at: http://www.susep.gov.br/download/menususep/gestao/RGe2009.pdf. WT/TPR/S/283 • Brazil 
 
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  Transitory Provisions, until the conditions of foreign investments are defined, the establishment of 
new agencies of financial institutions domiciled abroad is not permitted, and foreign individuals and entities may not invest in the capital of Brazilian financial institutions. However, Article 52 also determines that these restrictions may be lifted through a Presidential Decree if an investment is 
deemed of national interest. The establishment an d increase of capital of domestic and foreign 
banks was recognized as a matter of national interest by Ministry of Finance Statement of Principles No. 311 in 1995. Presidential decrees allow the Central Bank to authorize the 
establishment of new foreign financial institutions. Moreover, restrictions do not apply if 
authorizations are granted under international agreements or reciprocity conditions.  
4.140.  In order to obtain Central Bank approval, financial institutions must fulfil the conditions 
contained in CMN Resolution No. 4,122 of 2 Augu st 2012 and in Central Bank Circular No. 3,317 
of 29 March 2006. The President of the Republic gr ants authorization upon recommendation by the 
CMN, which is contingent upon recommendation by the Central Bank. Applications by foreign investors must specify, inter alia , the amount of foreign participation in the total capital, the 
investor's existing activities in the Brazilian financial system, and the benefits to the Brazilian 
economy. 
4.141.  Domestic and foreign financial institutio ns operating in Brazil must comply permanently 
with minimum capital requirements specified by the Central Bank, ranging from R$200,000 
(US$96,000) for micro-entrepreneur credit societies to R$17.5 million (US$8.4 million) for commercial banks and multiple banks with commercial portfolio. In the latter case, actual minimum capital requirements depend upon the types of portfolios held. Financial institutions that 
request installation of more than ten branches must add 2% paid-in capital and net equity per 
branch in the states of Rio de Janeiro and São Paulo, and 1% per branch in other states.
170  
4.5.1.3  Banking 
4.5.1.3.1  General features and market development 
4.142.  The number of institutions participating in  Brazilian banking remained stable during the 
review period. In June 2012, there were 138 multiple banks (137 in December), of which 55 were 
controlled by foreign capital, 15 had foreign capital participation, and 68 were domestic. 
Additionally, there were 22 commercial banks (6 branches of foreign banks, 3 under foreign 
control, and 2 with foreign capital participation), 4 development banks, 15 investment banks, and 1 savings bank. There was partial or total foreign ownership in 36% of financial institutions.
171 The 
top 50 banks increased their share of total banking assets from 86.6% in March 2008 to 95.5% 
in June 2012, while their share of deposits grew  from 91.7% to 95.7%. Twenty of them are 
foreign-controlled private banks, 21 are domestic private, and 9 are government-owned, 4 of 
which federally owned and 5 owned by the states. In  November 2012, 44.1% of the total assets of 
the Brazilian banking system were controlled by public institutions, 38.7% by private domestic 
institutions, and foreign participation was 17.2%. The largest bank is the Banco do Brasil, whose 
share of total assets increased from 14.4% in 2007 to 16.9% in November 2012.172  
4.143.  The Credit Guarantee Fund (FGC) was established in 1995 as a private, not-for-profit 
entity to administer a compulsory deposit insurance scheme and contribute to the financial system's stability. The FGC is financed by contributions from its associated financial institutions, 
which must contribute 0.0125% of the balance of the accounts guaranteed (current accounts, 
savings accounts, and term deposits). Credits of up to R$70,000 (approximately US$34,500) per person per financial institution are eligible for FGC coverage. Deposits totalling R$1.36 trillion were 
covered by the FGC in June 2012, represen ting around 40% of existing credit.
173  
4.144.  During the period under review, financia l intermediation maintained an upward trend, 
although at a slower pace from 2011 onwards as a consequence of new macro prudential 
measures. The stock of credit operations  totalled R$2.3 trillion or 52.6% of GDP 
                                               
170 Central Bank of Brazil (2012). 
171 Central Bank of Brazil (2012). 
172 Central Bank of Brazil online information. View ed at: http://www4.bcb.gov .br/fis/TOP50/ingl/Top 
50I.asp. 
173 Central Bank of Brazil online information. Viewed  at: http://www.bcb.gov.b r/fis/fgc/estat/arquivos/ 
Resumo/FGC-Resumo-semestral-062012.pdf. WT/TPR/S/283 • Brazil 
 
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  in November 2012, up from 37% in July 2008. Continued credit growth is partially explained by 
the reduction of interest rates by public banks in order to stimulate demand, which in turn has given government-owned banks a larger share in the total credit portfolio, at 47% as of November 2012. Earmarked credit represented 36% of total credit and 19.4% of GDP in 2012. 
In November 2012, defaults comprised 3.7% of total credits, "normal" risk credit represented 
92.1% of total credit, and provisions for losses were 5.7%. The Government has sought to guarantee credit availability during and after the international financial crisis through official 
banks, particularly the BNDES, and through the pr ovision of liquidity to the banking system by 
reducing reserve requirements (although these were  raised in 2012. Earmarked credit delivered by 
state-owned banks remains an important tool in the Brazilian economy.
174  
4.145.  The banking system's return on equities dropped from around 16% in June 2009 to 14.4% 
in June 2012. Brazil's banking system maintained capital ratios and Basel Index scores well above 
requirements throughout the period under review, in spite of the stricter capital requirements 
introduced in 2012 (10.2% and 16.4%, respectively in June 2012). Stress tests carried out by the 
Central Bank indicate that the Brazilian banking system is capable of withstanding shocks resulting 
from a severe deterioration in macroeconomic conditions lasting up to four consecutive quarters, as well as abrupt changes in the level of default, interest rates or exchange rates.
175  
4.146.  Interest rate spreads have continued to drop as a result of public banks' reduced interest 
lending rates and despite lower savings rates. Lower market rates have followed the decline of the monetary policy interest rate SELIC (from 12.5% in August 2011 to 7.25% in October 2012) and benefited from progress on the de-indexation of th e Brazilian economy, especially the elimination 
of a fixed minimum interest rate stipulated by legal regulation for savings accounts ( caderneta de 
poupança ). The process has been helped by Central Bank regulations to improve the comparability 
of bank services and the portability of credit operations in order to foster competition.
176 The 
average lending rate fell from 42.9% in October 2008 to 28.9% in November 2012, while the 
average savings rate fell from 14.5% to 7.36%. As a result, the average spread hit a historical low of 21.6% in November 2012; the spread for individuals, at 27.3%, remains substantially higher 
than for companies (14.7%).
177 The average spread for 2012 was 24.3%.  
4.147.  According to the IMF, fiscal responsibility, a successful inflation targeting regime, and 
exchange rate flexibility have helped to reduce interest rates substantially. Moreover, the SFN weathered the global crisis remarkably well thanks to an adequate policy response and built-in 
financial buffers. However, currently available credit is generally still of short duration and at 
relatively high interest rates, which biases the financial market towards consumer finance at the expense of long-term investment finance. Consequently, developing private long-term finance at 
competitive interest rates remains a challenge, which will entail continued macroeconomic 
stability, further financial reform, and rethinking the role of state-owned banks.
178  
4.5.1.3.2  Legal and regulatory framework 
4.148.  The legal framework for banking in Brazil remained largely unmodified during the review 
period. The banking sector, as well as other financial services, is regulated at the federal level. The main legislation includes Article 192 of the Federal Constitution, Article 52 of the Temporary Constitutional Provisions Act, Law No. 4,595 of 31 December 1964, Law No. 4,728 of 14 July 1965, 
Law No. 6,024 of 13 March 1974, Law No. 7,492 of 16 June 1986,  Law No. 9,613 of 3 March 1998, 
and Supplementary Law No. 105 of 10 January 2 001, and Resolution No. 3,040/2002. The Central 
Bank's Manual of Norms and Instructions  contains most banking regulations, which issue from the 
National Monetary Council.
179  
4.149.  With the enactment of the current Brazilian  Constitution of 1988, the inflow of foreign 
capital in the SFN became subject to the provisio ns in the Act of Transitory Provisions of the 
                                               
174 Central Bank of Brazil (2010). 
175 Central Bank of Brazil (2012). 
176 In 2012, the National Monetary Council issued re gulations concerning the Cadastro Positivo, an 
expanded credit bureau that will register the history of payments of credit operations, utilities’ bills, and other 
debts of households and ente rprises. When fully implemented, the Cada stro will provide information to help 
banks identify good borrowers, which is expected to lead to  further spread reductions. 
177 Information provided by the Brazilian authorities. 
178 IMF (2012). 
179 Central Bank of Brazil online information.  Viewed at: http://www.bcb.gov.br/?MANUMCR. WT/TPR/S/283 • Brazil 
 
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  Constitution, which prevents the establishment, in Brazil, of new branches of foreign financial 
institutions and the increase in participation of foreign individuals or legal entities in the equity of national financial institutions, until the conditions for the participation of foreign capital in these institutions is determined, by means of a supplementary Law. However, the same constitutional 
provision admits exceptions in case of authorizations resulting from international agreements, 
reciprocity, or of national interest. The manifestat ion of such interest has been interpreted to mean 
an authorization by Presidential Decree, and such is currently the practice. In order to engage in 
banking activities, foreign banks must be established as a subsidiary or branch, and are in 
principle subject to the same prudential requirem ents as domestic banks. These are set by the 
CMN and include capital requirements, prudential regulations, and specific qualifications for the administrators of the institution, who need not be Brazilian nationals; however, those directly 
responsible for the administration of the institution must be Brazilian residents.  
4.150.  Representation within Brazil of financial institutions headquartered abroad requires prior 
authorization by the Central Bank of Braz il, as regulated by Resolution No. 2,592 
of 25 February 1999 and its complementary regulations. Local representatives must be natural or 
legal persons domiciled in Brazil. Representative offices are prohibited from taking deposits or undertaking any other financial transaction. Cross-border supply of banking services is not 
permitted in Brazil. Consumption of bankin g services abroad is not regulated.  
4.151.  The National System of Rural Credit (SNCR)  aims to guarantee access to public and private 
credit for farmers. Banks must allocate resources (mandatory resources and rural savings) to farmers and their cooperatives, in accordance with the conditions set by the CMN. Rural credit is 
intended to stimulate investment in agricultural production, improve productivity, facilitate 
production financing, develop forestry and fishing, and increase profit for smallholders. Rural credit 
through mandatory resources is available at an a nnual interest rate ranging from 1% to 5.5%, up 
to a R$800,000 limit. Conditions for credit operations that do not come from "controlled" resources 
may be set freely between the parties.
180 
4.152.  In March 2009, the Central Bank published Resolution CMN No. 3,704181, establishing the 
gradual reduction of mandatory resources that banks must set aside for the agriculture sector:  
from 30% of demand deposits and a specific savings account called poupança rural  until 
June 2010, to 25% starting June 2014. Despite this  intervention, the share of rural credit financed 
with mandatory resources did not recover to previous levels and the Government announced a 
new rate of 34%, in force from 1 July 2012.182 The legal basis for agricultural credit is Law 
No. 4,829, of 5 November 1965, and Law No. 8,171 of 17 January 1991, as amended most recently by Law No. 11,718, of 20 June 2008; regulations are contained in the Central Bank's 
Rural Credit Manual (MCR).
183 
4.153.  Brazil adopted the Basel III framework re commendations on banking supervision ahead of 
schedule, starting in July 2012, as indicated in Communique No. 20,615 of 17 February 2011. The 
main changes relate to capital and liquidity requirements and leverage ratio; the minimum overall 
Basel Index increased from 8% to 13%. Brazil's existing capital adequacy requirements, established in 2007, were already more stringent than required by Basel II, since they ranged from 11% to 17% according to the type of financia l institution. In February 2012, the Central Bank 
called for a public hearing to evaluate the conditions for compliance as described in 
Edict No. 40/2012.
184 The final regulations were issued on 1 March 2013 and comprised four 
resolutions by the National Monetary Council and 15 circulars by the Central Bank of Brazil. The 
resolutions covered: redefinition of capital; new capital requirements and introduction of capital 
buffers for institutions in general; optional simplified new capital requirements and capital buffers for single credit cooperatives; and the scope of consolidation of accounting statements of financial 
institutions. The circulars redefined the methodology of calculation of risk-weighted assets (RWAs) 
                                               
180 Central Bank of Brazil online information. Vi ewed at: http://www.bcb.gov.br/?RED-CREDITORURAL 
FAQ. 
181 Central Bank of Brazil online information. View ed at: http://www.bcb.gov.br/pre/normativos/res/ 
2009/pdf/res_3704_v1_O.pdf. 
182 Central Bank of Brazil Resolution No. 4.096 of 20 June 2012. 
183 The last modification to the MCR ( Atualizaçao  No. 554) was introduced on 26 November 2012.  For 
the complete MCR see Central Bank of Brazil online information. Viewed at: http://www.bcb.gov.br. 
184 Central Bank of Brazil online information. Vi ewed at: http://www.bcb.gov.br/textonoticia.asp? 
codigo=3413&idpai=NOTICIAS. WT/TPR/S/283 • Brazil 
 
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  for credit risk, market risk, and operational risk for institutions that use the standardized 
approaches or the advanced approaches of capital calculation. 
4.154.  The authorities indicated that  Brazil is committed to implementing Basel III gradually and 
that its adoption is not expected to imply a significant capitalization effort for the financial system, 
since Basel III establishes minimum capital requ irements of 10.5% (8% requirement + 2.5% 
conservation buffer), which is lower than the Brazilian requirements. 
4.155.  According to the IMF, banking supervision already had a high level of compliance with 
Basel Core Principles, and has been strengthened further due to an intrusive, sophisticated, and 
risk-based approach. In addition, the early implementation of Basel III, including countercyclical capital and surcharges for domestic systemically important banks (D-SIBs), will provide additional 
tools to boost the resilience of the system. 
4.156.  Brazil currently has information-sharing agreements with the financial supervisory 
authorities of 15 countries: Argentina, the Bahamas, the Cayman Islands, China, Germany, Indonesia, Italy, Mexico, Panama, Paraguay, Portug al, South Africa, Spain, Uruguay, the, and the 
United States. Informal arrangements are in plac e with the United Kingdom, with whom a formal 
agreement is been negotiated, as well as with Austria, Korea, and Switzerland. 
4.5.1.4  Insurance 
4.157.  Insurance activities account for an estimated 3.76% of GDP. In December 2012, the total 
market value of premiums, investment plan income, and receipts from open private pension contributions was around R$147.18 billion (some US$73 billion).
185 Total premiums were 
R$129.3 billion, 55.3% for life, 19.3% for moto r vehicle insurance, and the rest for fire, 
transportation, and other risks. There were 118 insurance companies in operation, as well as 
19 investment plan companies, and 25 open private pension fund societies.186 
4.158.  Competition in Brazil's reinsurance market continued to improve during the period under 
review. In late 2012, 102 reinsurance companies were authorized to operate, compared with 
21 in August 2008. Of the 102 authorized companies, 12 were local, 29 were registered as admitted and 61 as occasional.
187 Until 2007, IRB-Brasil Resseguros was the sole provider of 
reinsurance in Brazil. 
4.159.  The Federal Government has responsibility for formulating private insurance policy, as well 
as for establishing standards and overseeing op erations in the domestic market. The Brazilian 
national insurance system (SNSP) is composed of the National Council of Private Insurance 
(CNSP), the Superintendence of Private Insurance (SUSEP), insurance and reinsurance companies, 
and insurance brokers. The CNSP is the main body responsible for setting policies for the private insurance industry, including fixing the characteristics of the various insurance contracts, and for 
the regulation of the national insurance system. SUSEP, an autonomous body under the 
organizational structure of the Ministry of Finance, has responsibility for the control and 
supervision of insurance, reinsurance, open private pension funds, and capitalization (investment 
plans) and brokerage operations. SUSEP executes the CNSP policies.  
4.160.  The provision of insurance services in Brazil is governed by Decree Law No. 73 of 
21 November 1966, as modified by Decree No. 60,459 of 13 March 1967, Decree Law No. 261 of 28 February 1967, Law No. 10,190 of 14 Febr uary 2001, Supplementary Law No. 109 of 
29 May 2001, Supplementary Law No. 126 of 15 January 2007, and Law No. 12.249 of 
11 June 2010. CNSP Resolutions and SUSEP Circulars regulate the industry's operational activities. Insurance companies that provide only health insurance are subject to ANS regulations. 
4.161.  Supplementary Law No. 126 of 15 January 2007 amended Brazilian legislation to open the 
reinsurance market, thus ending the reinsurance monopoly held by IRB Brasil Re. According to the 
                                               
185 National Federation of Insurance Services Prov iders (FENASEG) online information. Viewed at: 
http://www.fenaseg.org.br/lumis/portal/file/fi leDownload.jsp?fileId=485C88E73B63259A013B764633F04705. 
186 SUSEP online information. Viewed at: http: //www.susep.gov.br/menu/informacoes-ao-publico/ 
mercado-supervisonado/enti dades-supervisionadas. 
187 National Federation of Insurance Services Prov iders (FENASEG) online information. Viewed at: 
http://www.fenaseg.org.br/lumis/portal/file/fi leDownload.jsp?fileId=8A8184D33B197757013B1A36D2AE4807. WT/TPR/S/283 • Brazil 
 
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  law, reinsurance and retrocession operations may be  carried out by local, admitted, and occasional 
reinsurers. Local reinsurers must be incorporat ed under Brazilian law and be headquartered in 
Brazil. Admitted reinsurers are domiciled abroad, but maintain a representative office in Brazil and are registered with SUSEP. Occasional reinsurers  are foreign companies without a representative 
office in Brazil and which are registered with SUSEP. Supplementary Law No. 126 also allows 
reinsurance and retrocession transactions to be conducted in foreign currency, subject to legislation governing such transactions, and to the rules set by the CMN, CNSP, and SUSEP. The 
law also provides for exceptions to the general rule that risks that take place in Brazil must be 
insured domestically. In this respect, Law No. 126 allows the contracting of insurance abroad by natural persons resident in Brazil or legal persons established  in Brazil to: cover risks for which 
there is no provision of insurance in Brazil, provided that this represents no violation of existing 
legislation; cover risks abroad where the insured is a natural person resident in Brazil, for which 
the term of the insurance contract is limited exclusively to the period in which the insured person is abroad; insurance policies that are the subject of international agreements ratified by Brazil; 
and insurance contracted abroad before the date of publication of the Supplementary Law. The law 
allows Brazilian legal persons to contract insurance abroad to cover risks abroad, provided this is 
notified to the SUSEP. 
4.162.  Law No. 12,249 of 11 June 2010 expanded th e coverage of the supervisory fee to include 
reinsurance companies ( Taxa de Fiscalização dos Mercados de Seguro e Resseguro, de 
Capitalização e de Previdência Complementar Aberta ).
188 Hence all insurance, and reinsurance, 
investment plan and private pension fund companies are subject to the fee, with the exception of 
health insurance companies.  
4.163.  Annex I to Law No. 12,249 contains a table of fees that increase in accordance with the 
margin of solvency.189 Insurance companies must pay a (higher) fee for the head office and for 
each subsidiary or agency. For reinsurance, there is a single fee per supplier. 
4.164.  Insurance companies are precluded by law fr om engaging in other financial activities. They 
may, however, provide more than one type insurance service and may hence be composite (life 
and non-life). The only exceptions apply to export credit insurance and health insurance 
companies, which must be specialized; life insurance companies, which may deal in open pension funds; and reinsurance companies. Foreign insurance companies providing insurance of any kind, except reinsurance, are required to be incorp orated under Brazilian law, in the form of a 
corporation.
190 
4.165.  Establishment of a foreign life or non-life insurance company requires prior approval from 
the SUSEP. Authorizations to operate are granted directly by the SUSEP. Once a foreign company 
is authorized to operate in Brazil, national treatment is granted. 
4.166.  Minimum capital requirements vary accord ing to the region of operation, the company's 
internal risk-management model, and the type of activity, as per CNSP Resolution 
No. 282/2013.191 For insurance companies and open pension funds that only operate in micro-
insurance the minimum capital requirements are defined by CNSP Resolution No. 263/2012. There 
                                               
188 Law No. 12,249. Viewed at: http://www.planalto.gov.br/ccivil_03/_Ato20072010/2010/ 
Lei/l12249.htm. 
189 The calculation of the margin of solvency varies in accordance with the type of insurance provided: 
for life insurance with capitalization, private pension funds or investment funds, the fee is 8% of all technical provisions and funds related to their activity; for other types of insurance to person s or covering damages, the 
fee is the higher of 20% of the net primiums of the la st 12 months or 33% of the annual average net claims in 
the past 36 months. 
190 WTO document GATS/SC/13/Suppl.3, 26 February 1998. 
191 In accordance with CNSP Resolution No. 282/2013,  insurance companies must maintain as capital 
base not less than R$1.2 million in fixed capital plus a variable amount up to R$13.8 million according to the 
geographic area of operation. They must maintain a capi tal of R$15 million if they wish to operate in the whole 
country. Capitalization companies and open pension funds must maintain R$1.8 million and R$1.2 million, and R$10.8 million and R$7.2 million, respectively. Insu rance companies, capitalization companies and open 
pension funds must maintain anytime the highest amou nt among the capital base, the required risk-based 
capital and the solvency margin. The required risk-b ased capital is established by CNSP Resolutions 
Nos. 228/2010, 280/2013, 283/2013, and 284/2013. WT/TPR/S/283 • Brazil 
 
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  are no barriers to the internal trade of insurance services as long as a company complies with 
these minimum capital requirements.192 
4.167.  Insurance brokers must be registered at  the SUSEP after passing a technical exam. New 
insurance products do not require pre-approval from the SUSEP, but should be submitted for 
analysis and filing before being commercialized. Exceptions to this are life insurance products that 
offer survivor coverage and annuities, capitalization plans, and open pension products, which all require prior approval from the SUSEP. Also, th e SUSEP may forbid the commercialization of any 
product considered incompatible with the industry's regulatory framework or specific provisions 
thereof, or deemed to be not technically feasible or badly structured.  
4.168.  Since 2007, the reinsurance business has been open to private reinsurance companies, 
including foreign-owned and foreign-based. Reinsurance and retrocession may be held with a local 
reinsurer (established as a corporation, with th e sole object of conducting operations of 
reinsurance and retrocession); an admitted re-insurer (based abroad, with a representative office in Brazil, registered in the SUSEP to carry out reinsurance and retrocession); or an occasional re-
insurer (foreign reinsurance company based abroad without a representative office in Brazil, also 
registered as such in the SUSEP). 
4.5.1.5  Securities 
4.169.  The São Paulo Stock Exchange (BM&F BOVESPA) is the most important Brazilian institution 
to intermediate equity market transactions and the only securities, commodities, and future markets. The BM&F BOVESPA is a Brazilian company, created in 2008, through the integration of the São Paulo Stock Exchange ( Bolsa de Valores de São Paulo ) and the Brazilian Mercantile & 
Futures Exchange ( Bolsa de Mercadorias e Futuros ). The BM&F BOVESPA is the largest stock 
exchange in Latin America; in December 2012, 521 companies were registered in the BM&F BOVESPA, with a market value of US$1.15 trillion
193, equivalent to some 50% of Brazilian GDP.  
4.170.  The Brazilian Securities Exchange Commiss ion (CVM), an independent government entity 
under the organizational structure of the Ministry of Finance, is in charge of supervising the securities markets in Brazil, with the exception of government bonds and private bonds, which are 
regulated by the Central Bank. The CVM has the power to issue complementary rules to laws and 
CMN resolutions, including instructions and deliberations.
194 The CVM is empowered to discipline 
and regulate the activities of all market pa rticipants. Stock exchanges and other market 
associations have been granted self-regulatory power and are considered as auxiliary entities of 
the CVM. However, the CVM has the authority to suspend trading, issuance, or distribution of 
securities as well as authority stock exchange operations. 
4.171.  The main laws that guide the securities market are Law No. 6,385/76, as amended (the 
Securities Law); and Law No. 6,404/76 (the Corporation Law). Law No. 10,303 of 31 October 2001 
and Law No. 10,411 of 26 February 2002 modified the previous two laws, especially regarding minority shareholding rights. Law No. 11,638  of 28 December 2007 introduced further 
modifications, particularly regarding pu blic disclosure of financial accounts. 
4.172.  CVM registration and authorization is required for the distribution of securities issues on 
the market; the purchase of securities for resale; intermediation or brokerage on operations involving securities; and the clearing and settlemen t of such operations. Only authorized agents 
registered with the CVM may engage in securities mediation or brokerage activities outside the 
stock exchange. Issuers of publicly distributed securities must be incorporated in Brazil as publicly held companies. 
4.173.  Foreign investors have access to all the investment products available to domestic 
investors, including forward, futures, and options contracts of farm products, in accordance with 
Resolution CMN No. 2,689/2000.
195 Funds brought into Brazil under the terms of 
Resolution No. 2,689/2000 must be declared and registered at the Central Bank. Foreign entities 
may invest in Brazilian capital markets through authorized investment companies or using 
                                               
192 SUSEP online information. Viewed at: http: //www.susep.gov.br/menumercado/capitalmin.asp. 
193 BOVESPA online information. Viewed at : http://www.bovespa.com.br/indexi.asp. 
194 CVM online information. Viewed at: http://www.cvm.gov.br/ingl/indexing.asp. 
195 BOVESPA online information. Viewed  at: http://www.bovespa.com.br/. WT/TPR/S/283 • Brazil 
 
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  depositary receipts.196 Non-resident individual investors must appoint a Brazilian resident as their 
representative responsible for registration procedures with the Central Bank and the CVM. Overseas transfers of custody positions between non-resident investors are only allowed in cases of mergers, incorporations, spinning-off proces ses, and other restructuring, or hereditary 
succession; they require prior authorization from the CVM. Non-resident investors may not acquire 
or sell securities of publicly listed companies across non-organized, over-the-counter markets or organized by entities not authorized by the CVM. Foreign investors receive national tax treatment 
in relation to operations in the financial and capital markets. 
4.5.2  Communication services 4.5.2.1  Main features 4.174.  The Brazilian telecommunications market continued to grow rapidly during the review 
period, driven in particular by the expansion of  mobile data services and broadband internet 
access. At the time of writing this report, tota l telecom revenues were expected to reach some 
US$120 billion in 2012
197, up from US$78 billion in 2007.198 Investments in the telecommunication 
sector increased from R$18.9 billion in 2008 to R$21.7 billion in 2011.199  
4.175.  The mobile telephony market boomed du ring the review years: the number of mobile 
telephone subscriptions increased by 74% be tween 2008 and December 2012 to reach 
261.8 million, with teledensity rising to 132.8 mobiles lines per 100 inhabitants over the same 
period; some 80.5% of the mobile lines are pre-paid.200 Internet usage reported impressive 
growth spurred by increased broadband access across the country, following initiatives by the Government to expand access and make-broadba nd connections cheaper under the National 
Broadband Plan (see 4.5.2.2. below). In December 2012, the total number of active internet users 
was estimated at 52.5 million.
201 The deployment of 3G networks in the whole of Brazil has 
significantly expanded mobile broadband access in recent years. Also, the number of fixed 
broadband subscriptions has shown solid growth. In late 2012, there were 19.8 million fixed 
broadband connections (equivalent to almost 10 connections per 100 inhabitants).202 On the other 
hand, the number of fixed telephone lines in service grew slowly during the review years, with only 
a slight increase in the teledensity level, to 22 lines per 100 inhabitants in 2011 (21.6 lines per 
100 inhabitants in 2008). In December 2012, there were 16.2 million pay-TV subscriptions, of which 38% were using cable technology.
203  
4.176.  Brazil's telecommunication sector was priv atized in 1998 and further liberalized in the early 
2000s. The former state-owned monopoly, Telebrás , was dismantled and the country's territory 
was divided into geographical areas: four areas for incumbents of the fixed switched telephone service (STFC), and ten for incumbents of cellular mobile service, currently named personal mobile 
service (PMS). In each region, the legislation established a duopoly between the privatized state 
monopoly entity and a "mirror" company in the case of fixed telephony, and between two new licensed operators in the case of mobile telephony.
204 Following the end of the transition period for 
the liberalization of the fixed telephony market in 2002, new authorizations were granted for local, 
national, and international long-distance services . By the end of 2012, there were 170 licensed 
fixed telephony service providers and five concessionaries (Embratel, Oi, Telefonica, CTBC, and Sercomtel).
205 The restriction precluding incumbents fr om operating in more than one of the 
                                               
196 Resolution CMN No. 2,763 of 9 August 2000 contains provisions on Brazilian Depositary Receipts. 
197 Research and Markets online information. Vi ewed at: http://www.reasearchand markets.com/ 
research/ad392be6/Brazil_telecoms. 
198 WTO (2009). 
199 Telco online information. View ed at http://www.telebrasil.org .br/saibamais/O_ Desempenho_do_ 
Setor_de_Telecom_Series_Temporais_2011_v3.pdf. 
200 Anatel online informat ion. Viewed at: http://sistemas.anatel.gov.br/SMP/Administracao/Consulta/ 
TecnologiaERBs/tela.asp.   
201 Information provided by ANATEL. 
202 Information provided by ANATEL. 
203 Anatel online information. Viewed at: http ://www.anatel.gov.br/Portal/verificaDocumentos/ 
documento.asp?numeroPublicacao=276484&assuntoPublicacao=Consolidação%20dos%20Serviços%20de%20TV%20por%20Assinatura%20 -%20Jan./Mar.%202012%20&caminhoRel=Iníc io-BibliotecaApresentação&filtro= 
1&documentoPath=276484.pdf. 
204 WTO (2009). 
205 Information provided by the Brazilian authorities. WT/TPR/S/283 • Brazil 
 
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  authorized regions was removed in 2008. As regards mobile telephony, there were between three 
and six service providers competing in each region in late 2012.  
4.177.  Brazil's telecommunication sector is fully open to competition and continues to attract new 
entrants. Nevertheless, the bulk of the market is divided between three leading telecom groups: 
Telefónica (Spain), América Móvil (Mexico), and Oi/Telemar (Brazil and Portugal). The State 
maintains a strategic stake in Oi through BNDES and the pension funds of state-owned enterprises.
206 In 2012, the leaders of the fixed-line telephone market were Oi/Telemar with a 
42% market share207, Telefônica Brasil with 23.78%208, Embratel (América Móvil) with 21.9%, and 
GVT with 8.21%.209 In the mobile market, the largest oper ator was Vivo (owned by Telefónica), 
with a 29% market share; followed by Tim (Telecom Italia) with 26.8%; Claro (América Móvil) with 24.9%; and Telemar with 18.8% (December 2012). Another three operators shared the 
remaining 0.31% of the mobile market.
210 The fixed broadband sector was led by Oi, accounting 
for 31.5% of the market in December 2012; its closest competitor was NET Serviços (operating in partnership with Embratel; both owned by América Móvil) with a 28.4% market share.
211 Other 
fixed broadband operators were Telefónica Brasil,  Sercomtel and CTBC. The major operators in the 
pay-TV market included Net Serviços, Sky Brasil, Embratel, Telefônica Brasil, and Oi TV.  
4.178.  Recent changes to the telecommunications legislation (see 4.5.2.2 below) have allowed 
telecommunication operators more flexibility to offer converged services. Brazil's operators have 
already made headway in Latin America in terms of deploying triple-play offerings (voice, broadband, and television) and some have plan s to offer quadruple-play multi-service packs 
(adding mobile telephony). This has led to further consolidation of Brazil's major telecom groups. 
4.179.  Strong market competition and regulation  have led to improvements in the quality of 
service and to reductions in tariffs. It is esti mated that the average price per minute of mobile 
phone calls in Brazil fell 44% (from R$0.39 to R$0.22) from the first quarter of 2009 
to March 2011.
212 Broadband prices have also dropped considerably in recent years, in part 
reflecting the Government's measures and investments aimed at reducing the cost of broadband connections in order to spread broadband access countrywide.
213 According to the International 
Telecommunications Union's ICT Price Basket (IPB) index, in 2010 Brazil's average prices for 
telecom services (fixed-telephony, mobile cellular telephony, and fixed broadband services) represented 4.8% of GNI per capita (6.8% in 2008); prices for fixed broadband services decreased by over 50% between 2008 and 2010.
214  
4.180.  Brazil's telecommunications regulator, ANATEL, is responsible for controlling the prices of 
fixed telephony services provided under a concession. In February 2012, ANATEL ordered the reduction of the retail price of a call from a fixe d line to a mobile phone from R$0.546 (US$0.311) 
per minute to R$0.487 (i.e. a 10.7% reduction). The regulator also ordered similar reductions 
for 2013 and 2014.
215 Under new regulations, groups holding significant market power in the 
mobile network interconnection market must also gradually reduce their interconnection charges. 
                                               
206 Oi online information. Viewed at: http://pub lisher.mzweb.com.br/oi/web/images/Oi_Composicao 
Acionaria_20120413_eng.gif#__utma=1.1491249028.1335946962.1335946962.1335946962.1&__utmb=1.24.7.1335947134682&__utmc=1&__utmx=&__utmz=1.1335946962.1.1.utmcsr=en.wikipedia.org|utmccn=(referral)|utmcmd=referral|utmcct=/wiki/Oi_(telecommunications)&__utmv=-&__utmk=76542485 [2 may 2012]. 
207 In early 2008, the concessionaire Oi acquired the concessionaire Brasil Telecom. 
208 Up until October 2011, Telefonica Brasil was named Telesp. 
209 Information provided by ANATEL.   
210 Information provided by ANATEL. 
211 ANATEL online information. Viewed at: http ://www.anatel.gov.br/Portal/verificaDocumentos/ 
documento.asp?numeroPublicacao=275705&pub=original&filtro=1&documentoPath=275705.pdf. 
212 Data from Teleco consultancy, quot ed in Telecompaper online article "Average mobile prices in Brazil 
drop 44% in two years", 11 June 2011. Viewed at http://www.telecompaper.com [2 May 2012]. 
213 Under the National Broadband Plan, the Government has issued a list of the cities covered by low-
cost fixed broadband services from some major operators,  which are reportedly offering internet access capped 
at R$35 (US$19.9) per month. 
214 ITU (2011). 
215 ICT Statistics Newslog. Viewed at http://iconnect.wto,org/IITU-D/ict/newslog/,DanaInfo=.awxyCmy 
0Gqw3+Antel+Or [ 8 February 2012]. WT/TPR/S/283 • Brazil 
 
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  4.5.2.2  Regulatory framework 
4.181.  The Ministry of Communications, through the Secretariat of Telecommunications, is the 
federal body responsible for policy formulation and planning for the sector. As defined in the 
legislation, the main policy objectives are to provide telecom services at affordable prices; to 
implement universal services; to foster competition, and to promote the sector's development in 
accordance with the country's social development goals.216 The Ministry of Communications is also 
responsible for policy formulation for radio and TV broadcasting. 
4.182.  The sector's regulator is the National Telecommunications Agency (ANATEL). The agency, 
which is administratively independent and financially autonomous, is responsible for implementating the national telecommunications policy, licence regulation, overseeing incumbents' operations, managing the electromagnetic spectrum, certifying telecommunications equipment, 
and protecting consumers' rights. ANATEL has the legal authority to review and control retail 
prices of fixed telephony services provided by concessionary companies under the public regime. Moreover, ANATEL is responsible for approving mergers in the telecommunication sector from a 
regulatory perspective, while competition issues are analysed by CADE (the competition authority) 
(Chapter 3.4.1). 
4.183.  The main legislation governing the sector is the General Telecommunications Law (LGT) 
of 16 July 1997 (Law No. 9,472), which regulates all telecommunication networks and services, 
except audiovisual services. Law No. 12,485 of 12  September 2011 provides a unified regulatory 
framework for pay-TV services regardless of the technology used. In October 2008, ANATEL published the General Plan for Updating Telecommunications Regulations, which sets out principles 
for reviewing the regulatory framework and implementing short, medium, and long-term 
reforms.
217 The main issues under consideration include reviewing the fixed telephony regulations, 
implementing unbundling, regulating the resale of services, making radio frequencies available so 
as to facilitate wide broadband access, increasing convergence services, quality standards, and 
universal service goals. Action on some of these issues has already been taken or is in progress. The National Broadband Plan was instituted in May 2010 (see below) and the General Plan for 
Universalization Goals (2011-15) was approved in June 2011. In November 2010, ANATEL issued a 
regulation enabling the supply of resale-based mobile telecommunications services through mobile virtual network operators.
218 ANATEL has also taken initial steps to regulate 4G mobile services219, 
and has announced plans to auction certain radio-electric spectrum for commercial mobile telecom 
services (see below).  
4.184.  Under the LGT, telecom services are divided into two regimes: the public regime, which 
covers the incumbent operators of fixed telephony; and the private regime, encompassing all other 
telecommunications services. In order to provide telecommunication services, a concession or 
authorization must be obtained from ANATEL. Co ncessions apply to incumbent operators of fixed 
telephony under the public regime220, while authorizations are required for the provision of the 
telecom services under the private regime, incl uding mobile telephony and broadband services. 
Concessions are subject to more stringent conditions than authorizations (e.g. universal service obligations, accountability, and tariff controls ); they are granted for 20 years, and may be 
extended once for the same period. All concessi ons were renewed in January 2006. Authorizations 
do not have a time-limit, but permits for the use of radio frequency by authorization-holders are 
limited to a maximum of 20 years,  renewable only once. There are no limits to the number of new 
authorizations that may be granted in the country as a whole, or by region. 
4.185.  Authorizations are service-specific: a personal mobile service (SMP) authorization is 
required for the provision of mobile telephony services; and a multimedia communication service (SCM) for convergence services integrating voice,  data, and images (e.g. providers of broadband 
services). An authorization is also required for the provision of pay-TV services.  
4.186.  Value-added services are not deemed telecommunication services and therefore do not 
require an authorization. However, the provision of value-added services must be coupled with a 
                                               
216 General Telecommunications Law (LGT) No. 9,472 of 16 July 1997. 
217 ANATEL Resolution No. 516 of 30 October 2008. 
218 ANATEL Resolution No. 550 of 22 November 2010. 
219 ANATEL Resolution No. 544 of April 2011. 
220 However, fixed telephony may also be rendered under the private regime.   WT/TPR/S/283 • Brazil 
 
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  telecommunication service regulated by ANATEL; e.g.  the provision of broadband services requires 
an authorization for the telecom service supporting the connection, irrespective of the technology used. Voice over internet protocol (VoIP) services are treated as voice telephony services, but are not regulated if merely peer-to-peer. Providers of VoIP services do, however, need an 
authorization if they access the public switched telephone network (PSTN).
221  
4.187.  The LGT confers on the Executive Branch th e right to limit foreign participation in telecom 
service operators222, and Federal Decree 2,167 of 1998 establishes that concessions and 
authorizations may be granted only to companies established in Brazil under domestic law. 
Nevertheless, the legislation in force makes no distinction between foreign and domestic capital, and there are currently no restrictions on foreign participation in the telecom companies (except in radio and TV broadcasting, which are not covered by the LGT). 
4.188.  Law No. 12,485 of 12 September 2011 removed the limit on foreign investment in cable 
TV services.
223 Another important change under this law was the elimination of the prohibition on 
fixed-line telephony operators to provide cable TV services.224 Law No. 12,485 also allowed all 
telecom operators to provide pay-TV services anywhere in Brazil, without regional limitations.225 
However, to encourage the development of Brazil 's audio-visual industry, the law established a 
quota system imposing a minimum number of channels with Brazilian content and a minimum 
number of hours of Brazilian content on other channels; these restrictions will apply during the 
first 12 years that the law is in force.226  
4.189.  Under the LGT, ANATEL has the authority to review and control the retail prices of fixed 
telephony services rendered by the companies operating under the public regime, i.e. those 
provided by the incumbents.227 The agency establishes maximum rates for the basic service plan, 
although concessionaries may still offer alternative plans on a non-discriminatory basis. Prices for local, and national and international long-distance calls are subject to specific regulations.
228 
Cross-subsidization between different services or users markets is prohibited.229 Telecom operators 
under the private regime are free to set retail pric es for their services. There are no retail price 
caps for mobile telephony or for fixed telephony provided under the private regime. The cost of 
wholesale (carrier-to-carrier) leased lines up to certain capacities is also regulated by ANATEL as 
well as certain interconnection charges.  
4.190.  Network interconnection is mandatory for the provision of public telecom services, under 
non-discriminatory conditions and at reasonable rates.230 Any provider of telecom networks and 
services has the right and obligation to negotiate interconnection terms with other telecom 
operators. The regulation on interconnection forbids cross-subsidisation, discriminatory discounts, abusive behaviour, and other anti-competitive practices.
231 ANATEL sets the interconnection prices 
for telecom services under the public regime, while  interconnection tariffs for services under the 
private regime are negotiated freely, but subject to control by ANATEL. All interconnection agreements, including the tariff conditions, must be notified to ANATEL and made public. Under 
Decree No. 4,733, interconnection prices must be based on costs and calculated through cost-
                                               
221 If only incoming to the PSTN, an SCM authorizat ion is required. If incoming and outgoing with 
respect to the PSTN, a switched fixed telephony licence is required. 
222 Law No. 9,472 (Article 18). 
223 Formerly, under Law No. 8,977 of 6 January 1995 (Cable Law), for pay-TV services provided via 
cable, at least 51% of the capital of the companies ha d to be owned by Brazilians or foreigners having had 
Brazilian citizenship for the preceding ten years. Law No. 12,485 of 12 September 2011 replaced the relevant provisions of Law No. 8,977. 
224 This change has allowed fixed-line incumbent Embratel to take control of its subsidiary Net Seviços.   
225 Previously, by means of Resolution No. 551 of 3 December 2010, ANATEL had removed the limitation 
on the number of cable TV operators that  could offer services in Brazil's cities. 
226 Regulations are expected from Br azil's national audiovisual author ity, ANCINE, with respect to  
mandatory minimum percentages of national co ntent to be exhibited in pay-TV services. 
227 Law No. 9,472 (Article 19, VII). 
228 See ANATEL Resolution No. 423 of 6 Dece mber 2005 (modified by Resolution No. 432 of 
23 February 2006), and Resolution No. 424 of 6 December 2005. 
229 Law No. 9,472 (Article 103). 
230 Law No. 9,472 (Articles 146, 147 and 152). 
231 General Regulation on Interco nnection, annexed to ANATEL Resolution No. 410 of 11 July 2005. WT/TPR/S/283 • Brazil 
 
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  based methodologies. ANATEL is empowered to apply a cap to interconnection prices charged by 
operators deemed to have significant market power.232 However, this has not yet occurred. 
4.191.  When telecom operators fail to reach agreement on interconnection terms within a 60-day 
period, any of the parties involved may request ANATEL to arbitrate under the administrative 
procedures established in the legislation. The agency is empowered to order interconnection and 
the corresponding price and conditions. Such decisi ons may be challenged before federal courts.  
4.192.  ANATEL regulates the use of telephone numbers and network identifying codes. Number 
portability was allowed in 2007233, and implemented throughout 2008 and 2009. A private 
association, hired through public bidding, manages the central reference databank for number portability.  
4.193.  In matters of competition law enforc ement involving the telecommunications sector, 
ANATEL cooperates with CADE (the competition tribunal). Under the LGT, ANATEL is responsible 
for approving mergers in the telecommunications sector. Under the new competition law (Law No. 12,529 of 2011) ANATEL is still responsible for approving mergers in the telecommunication 
sector, but only from a regulatory perspective, while competition issues are now analysed 
exclusively by CADE. Over the past few years, CADE has considered cases of both merger and 
anti-competitive practices in the telecommunication sector. For example, in February 2012, CADE 
opened an investigation of telecoms company Oi over allegations it abused its dominance and used 
discriminatory practices against rival internet service providers. At the time of writing CADE had not yet render a decision on this case. 
4.194.  The General Plan of Competition Goals, approved by ANATEL in October 2012, established 
asymmetric obligations on groups deemed to have significant market power (SMP) in identified 
relevant markets. In the relevant market of network access for data transmission (through copper and coaxial cable in transmission rates of less than  10 Mbps), identified groups with SMP have the 
obligation to share their networks. In addition, under the General Plan of Competition Goals, 
groups holding SMP in the mobile network interconnection market must reduce gradually the value of their interconnection charges to R$0.33 in 2013; R$0.25 in 2014; and R$0.16 in 2015. 
4.195.  The LGT established the legal basis for local loop unbundling (LLU). The General Plan of 
Competition Goals, includes new rules on unbundling. 
4.196.  The National Broadband Plan (PNBL) wa s instituted by Decree No. 7,175 of 13 May 2010 
with the aim of boosting access to broadband serv ices across the country and bridging the digital 
divide, in collaboration with private operators. The same decree tasked the former state-monopoly 
Telebrás to administer the plan and take over the national optical fibre backbone network, which is 
to be extended to more than 30,000 kilometres and reach 4,424 municipalities by 2017.
234 The 
network will carry low-cost traffic flow to local broadband providers. Other actions under the PNBL 
include: spectrum auctions to increase mobile broadband coverage; agreements between the Ministry of Communications, ANATEL and se veral telecommunication companies to offer 
connections of 1 Mbps at R$35 per month to consumers; and a special tax regime to stimulate 
investment in the networks. Under the National Broadband Program Special Taxation Regime (REPNBL), created by Law No. 12,715 of 17 Sept ember 2012, projects for the implementation, 
expansion or modernization of telecommunications networks that support access to broadband 
internet are exempt from federal taxes on the purchase of domestic equipment and for contracting 
deployment of networks, including building material s. Furthermore, tax exemptions and reductions 
have been established for smartphones, machine-to-machine communications, networks using 
the 450 Mhz spectrum, and satellite stations.
235 
4.197.  Under the Brazilian procurement law, Law No. 12,349 of 15 December 2010, procurement 
contracts dealing with information and communication technology systems deemed strategic may 
                                               
232 Criteria for defining "significant market power"  are established in ANATEL Resolution No. 438 of 
10 July 2006, and No. 458 of 8 February 2007. 
233 ANATEL Resolution No. 460 of 3 March 2007. 
234 In September 2012, the PNBL covered 1,842 municipalities (MC online information. Viewed at: 
http://www.mc.gov.br/acoes-e-programas/programa-na cional-de-banda-larga-pnbl/municipios-atendidos 
[September 2012]). 
235 Information provided by the Brazilian authorities. WT/TPR/S/283 • Brazil 
 
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  be restricted to goods and services developed in  Brazil and produced in accordance with the 
so-called Basic Productive Process (PPB). 
4.198.  In June 2012, ANATEL auctioned radio spectrum in the 450 Mhz and 2.5 Ghz bands for 
commercial mobile services. The notice required that winning bidders commit to purchase goods, 
products, equipment, and systems for telecommunications and data networks with national 
technology, and ensure that, after five years, 50%  of the equipment, telecommunications systems, 
and networks be produced locally (regardless of the origin of capital), and 20% be produced with 
technology developed in the country. These conditions may be waived by ANATEL under certain 
circumstances. Upon request by some WTO Members, the Committee on Trade-Related Investment Measures (TRIMS) considered the matter at its meetings of May and October 2012. Questions were addressed to Brazil regarding the local-content provisions in the auction bid.
236 
Brazil provided written replies to those questions.237  
4.199.  Universal service obligations apply to tele communication operators under the public regime 
(i.e., the incumbents of local fixed telephony services), which must meet the universal goals set by 
Presidential Decree No. 7512/2011. The Universal Service Plan (PGMU) for 2011-15 was approved 
in February 2010.238 It established plans for the installation of public telephones in all rural schools 
and rural health posts across Brazil, among other objectives. Some R$2.1 billion are expected to 
be invested in infrastructure and maintenance under the PGMU over the six-year period.239 The 
Universal Telecommunications Service Fund (FUST), managed by ANATEL to support universalization efforts, is funded, inter alia,  by the federal budget and by compulsory 
contributions from all telecom operators, equal to 1.0% of the total operating income. The 
authorities indicated that in November 2012 the fund totalled around R$14.2 billion.  
4.5.3  Air transport and airports 4.5.3.1  Main features  
4.200.  Brazil is the world's fourth largest aviation market and expanded rapidly during most of the 
review period. Spurred by strong economic  growth, between 2007 and 2010, Brazil's regular 
domestic and international passenger traffic grew by 53% and 57%, respectively, in terms of paid-
seats per km flown.
240 In 2010, Brazilian carriers served 71.4 million passengers on domestic 
flights and 5.2 million passengers on international flights.241 A total of 892.8 million tonnes of 
freight per km were transported on domestic and international flights in 2010.242 The Brazilian 
aviation industry's performance indicators (e.g. regularity, punctuality, and overall operational 
efficiency) improved during the period under review.243 However, reflecting the recent slowdown of 
the country's economy, the domestic aviation industry grew at a slower pace during 2011 
and 2012. 
4.201.  There are about 37 registered airlines in Brazil, of which 17 are currently operating. Grupo 
TAM and Gol continue to be the dominant carriers,  with 39.8% and 34.8% of the domestic market, 
respectively (April 2012). However, smaller carrier s, mainly focused on short and underdeveloped 
routes within Brazil, have expanded their market participation in recent years. Azul, which started 
operations in 2008, now has 9.9% of the domestic market, followed by Webjet (a Gol's subsidiary 
since 2011) with a 5.3% market share, Avianca Br azil with 4.9%, and TRIP (partially owned by 
TAM) with 4.3%. The rest of the market (less than 1%) consists of 11 small regional carriers. In 
the international market, Brazil's only long-haul carrier TAM maintains a dominant position with 
a 90.3% share (among Brazilian carriers), followed by Gol with 9.7% (April 2012).244 In 
                                               
236 WTO documents G/TRIMS/W/93 of 20 April 2012, G/TRIMS/W/107 of 20 September 2012. 
237 WTO documents G/TRIMS/W/99 of 15 May 2012, G/TRIMS/W/113 of 5 October 2012. 
238 ANTEL Resolution No. 539 of 24 February 2010. 
239 ICT Statistics Newslog. Viewed at: http://www.itu/int/ITUD/ict/newslog/Brazil+Starts+Ne+ 
Universal+Service+Plan.asp [7 May 2012]. 
240 ANAC (2010). 
241 Information provided by ANAC. 
242 ANAC (2010). 
243 For example, in 2010, on average 17% of regular flights provided by airlines operating in Brazil were 
delayed (in the case of domest ic flights, by 15 minutes or more, and in ternational flights, 30 minutes or more), 
compared with 35% in 2007 (ANAC, 2010). 
244 ANAC online information. View ed at: http://www2.anac.gov.br/dad osComparativos/2012/abril.xlsx. WT/TPR/S/283 • Brazil 
 
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  December 2011, Brazil's antitrust authorities a pproved the merger of Chile's LAN airlines and 
Brazil's TAM, paving the way for the creation of Latin America's largest airline.245  
4.202.  In 2011, just over 17% of Brazil's imports (by value) and 4.3% of its exports were moved 
via air cargo. Between 2008 and 2011, total air cargo (ports, exports, and domestic cargo) 
increased by 25% as measured by tonnes of merchandise transported. In 2011, the cargo 
terminals in the two main airports of the metropolitan area of São Paulo (Guarulhos and Viracopos) were responsible for 63.8% of total import cargo (by volume) moved through Brazilian 
airports, and 72.3% of total export cargo.
246 In the same year, 21% of total air cargo was carried 
by Brazilian companies, and 79% by foreign companies.247  
4.203.  Of a total 2,597 airports and airstrips in Brazil, 1,875 are private and 722 are state-
owned.248 INFRAERO, a public enterprise linked to the Civil Aviation Secretariat, is responsible for 
the operation and management of 64 main commercial airports, 120 air navigation support 
stations, and 34 cargo terminals across the country. In 2012, concessions were granted for the operation of the international airports of Brasi lia, Guarulhos, and Viracopos (section 4.5.3.2.2. 
below). Until 2011, INFRAERO's airports handled 97% of Brazil's regular air traffic, equivalent 
to 2.9 million take-offs and landings, and tran sported 179.9 million passengers (up almost 63% 
over 2007) and 1.46 million tonnes of cargo (12% over 2007).
249 The airports managed by 
INFRAERO are owned by the Federal Government solely or in association with the states and 
municipalities.  
4.204.  Brazil's airport infrastructure has not expa nded at the same pace as economic growth and 
faces significant bottlenecks, in particular in São Paulo, the country's most important hub. 
According to IATA, 13 out of 20 major Brazilian airports are operating beyond capacity.250 
Moreover, in addition to the expected increase in domestic demand in the next few years, Brazil will host the 2014 FIFA World Cup and the 2016 Summer Olympic Games, which will further strain 
its airport infrastructure. The Brazilian Government has committed to addressing these bottlenecks 
through public and private investments in infrastructure under the Growth Acceleration Programme (PAC)
251, and has adopted a concessions programme to allow private participation in expanding 
infrastructure and operating airports (see 4.5.3.2.2 below). Upgrading Brazil's physical 
infrastructure will be critical to improving its international competitiveness.  
4.5.3.2  Regulatory framework 4.5.3.2.1  Air transport services 
4.205.  Until recently, responsibility for formulating and implementing civil aviation policy in Brazil 
rested primarily with the Ministry of Defence. However, Law No. 12,462 of 4 August 2011, created 
the Civil Aviation Secretariat (SAC/PR), directly linked to the Presidential Executive Office and 
headed by a Chief-Minister. The SAC/PR took over some of the civil aviation functions previously 
exercised by the Ministry of Defe nce, and is now responsible for, inter alia,  formulating policies and 
strategic plans for the development of the civil avia tion sector, overseeing plans to open up airport 
investment to private companies, approving conce ssions to build new airports and terminals, and 
delegating to the States, Federal District, and municipalities the management, operation, and 
maintenance of public airfields.
252 The new Secretariat is also responsible for coordinating the 
activities of other government entities involved in civil aviation, and for establishing directives for 
Brazil's participation in international civil aviation conventions and agreements. The Civil Aviation 
                                               
245 After the merger, 82.73% of TAM shares with voti ng rights remained in Brazilian hands; 4.81% are 
owned by LAN shareholders, 3.13% by other TAM sh areholders, and 9.32% by other shareholders.   
246 INFRAERO, Boletin Logístico , December 2011. Viewed at: http://www.infraero.gov.br/images/ 
strories/Infraero/cargo/Boletins_Logisticos [May 2012]. 
247 Information provided by ANAC. 
248 ANAC online information. View ed at: http://www.anac.gov.br/Conteudo.aspx?slCD_ORIGEM=8&ttCD 
_CHAVE=118. [May 2012]. 
249 INFRAERO online information. Viewed at http:/ /www.infraero.gov.br/index.php/us/institucional/a-
infraero.html [September 2012]. 
250 MercoPress,  23 November 2010. Viewed at http://en.mercopress.com/2010/11/23/brazil-s-air-
transport-infrastructure [May 2012]. 
251 In August 2009, INFRAERO announced a R$5.3 billio n (US$2.8 billion) investment plan to upgrade 
airports in ten cities.   
252 Article 24 D of the Law No. 12.462. WT/TPR/S/283 • Brazil 
 
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  Council (CONAC), previously chaired by the Mini ster of Defence, and now chaired by the Chief-
Minister of SAC/PR, is in charge of advising the President in matters of civil aviation policy and setting guidelines for the sector.  
4.206.  Law No. 12,462 created a National Civil Aviation Fund (FNAC), administered by the 
SAC/PR, to provide resources for the development of airport and air traffic control infrastructure. 
The FNAC is financed through the revenues collected from airport concession fees, part of the international boarding fees, and from the ATAERO  surcharge applied on airport fees (see below).
253 
Law No. 12,462 also established a Differentiated Public Contracting system, applicable exclusively 
to the bidding procedures and contracts for infr astructure works related to the 2014 FIFA World 
Cup and the 2016 Summer Olympic Games.  
4.207.  The National Agency for Civil Aviation (ANAC), created in 2006, is in charge of the 
regulation and supervision of civil aviation.254 Its responsibilities include, inter alia , regulating 
safety and security matters related to civil aircraft, certifying aircraft and granting airline operation permits, conducting biddings for airport concessions, regulating the allocation of slots in congested 
airports, and licensing civil aviation personnel. The ANAC is also responsible for maintaining the 
Brazilian Aeronautic Registry (RAB), in which all Brazilian aircraft must be registered. The ANAC observes and implements the policies and guidelin es of the SAC/PR, but has administrative and 
financial autonomy. The Department of Air Space Control (DECEA), under the Aeronautics 
Command (COMAER) and the Ministry of Defence, provides most navigation and air traffic control services.   
4.208.  The main legal instrument governing the air transport sector is the Brazilian Aeronautical 
Code (CBA) of 1986, as amended.
255 Under the CBA, concessions for the provision of Brazilian-
based regular air transport services are granted on ly to Brazilian legal persons with headquarters 
in Brazil, managed exclusively by Brazilians, and in which four fifths of voting rights are in 
Brazilian hands.256 In November 2009, the Brazilian Senate approved a bill that increases the limit 
of foreign ownership in Brazilian airlines from 20% to 49%, with the purpose of stimulating foreign investment. However, the bill is still under consideration in the Chamber of Deputies.
257 Domestic 
public air transport services (cabotage) are reserved to Brazilian legal persons.258 Foreign 
enterprises wishing to provide regular international air transport services must be designated by the Government of their home country, and obtain an authorization to operate in Brazil and an authorization to operate air services.
259 
4.209.  Domestic air fares are determined freely by airline companies, but must be registered with 
the ANAC.260 In 2008, the free pricing regime was introduced for international flights originating in 
Brazil and with destinations in South American countries.261 In 2010, the regime was extended to 
all international flights (passengers and cargo) originating in Brazil.262  
4.210.  Brazil's civil aviation policy pursues greate r insertion of Brazilian aviation in international 
markets, through the conclusion of air services agreements (ASAs). ANAC is responsible for the 
negotiation of such agreements under the guidelines set by the SAC/PR and the CONAC.263 and the 
SAC/PR. Brazil has over 80 ASAs, of which 53 were either concluded, renegotiated or entered into force during the review period (Table A4.1). Brazil has sought to make ASAs more flexible by increasing traffic rights, opening new routes an d removing capacity restrictions. The new or 
renegotiated ASAs tend to be more liberal th an previous agreements. They grant at least 
5
th freedom rights, and in most cases include clauses on cooperation and code-sharing, multiple 
designation, and free-pricing. Most of the renegotiated agreements also contain free determination 
of capacity clauses.  
                                               
253 Law No 12,648 of 17 May 2012 stipulates that FNAC resources shall be used exclusively for the 
development of civil aviation and its infrastructure. 
254 Law No. 11,182 of 27 September 2005. 
255 Law No. 7,565 of 19 December 1986. 
256 Articles 180 and 181 of Law No. 7,565 of 19 December 1986. 
257 Bill No. 6,716/2009. 
258 Article 216 of Law No. 7,565 of 19 December 1986. 
259 Article 206 of Law No. 7,565 of 19 December 1986. 
260 Article 49 of Law No. 11,182 of 27 September 2005, and ANAC Resolution No. 140/2010. 
261 ANAC Resolution No. 16 of 27 February 2008. 
262 ANAC Resolutions No. 83 and No. 118 of 2009. 
263 CONAC Resolution No. 007/2007 of 20 July 2007. WT/TPR/S/283 • Brazil 
 
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  4.211.  The main ASAs concluded by Brazil during the review period include an open skies 
agreement with Chile, which entered into force in January 2011; a new air transport agreement with the United States that will remove limits on the number of passenger and cargo flights between Brazil and the United States by 2015, together with a MOU, which established a schedule 
for increasing the number of flights between the two countries from 2011 to 2015.
264 Also, a 
comprehensive ASA was negotiated with the European Union in 2011-12, allowing both parties' airlines to operate direct flights between Brazil and the EU, without restrictions on routes, prices, 
or the number of weekly flights. This ASA had not b een signed at the time of writing this report.  
4.212.  Brazil is part of the Fortaleza Agreement on regional air transport services, together with 
Argentina, Bolivia, Chile, Paraguay, Peru, and Uruguay. The agreement established a subregional air services regime covering all routes that are not operated under the bilateral agreements among 
the parties. The Fortaleza Agreement was originally intended as an alternative to restrictive 
bilateral agreements; now it is rarely used. Brazil also participated in the negotiation of the Multilateral Open Skies Agreement for the Member s States of the Latin American Civil Aviation 
Commission (LACAC), which it signed it in November 2012 with reservations regarding 7
th, 8th and 
9th freedom traffic rights. The agreement will ente r into force in Brazil after its ratification. 
4.5.3.2.2  Airports and auxiliary services 
4.213.  The Brazilian Aeronautical Code stipulates that public airports must be built, maintained, 
and operated by the State; by specialized co mpanies of the federal administration or its 
subsidiaries; through agreement with states and municipalities; or through concession or authorization. There are no legal restrictions for the participation of foreign investors in Brazilian 
airports. Until recently, however, all large public airports have been managed by the state-owned 
enterprise INFRAERO. 
4.214.  One of the most important changes in Brazil's air transport sector during the review 
period, was the Government's decision, announced in May 2011, to allow private investors to 
build, manage, and operate airports through concessions. The first concession was granted in August 2011 to the Consortium Inframérica (f ormed by Brazilian and Argentinian groups) to 
build and operate the São Gonçalo do Amarante airp ort in the Natal metropolitan area (Rio Grande 
do Norte).
265  
4.215.  Decree No. 7,624 of 22 November 2011 established the conditions for the exploitation of 
airport infrastructure by private operators through concessions. All concessions must have prior 
approval from the SAC/PR, while the ANAC is in  charge of carrying out the bidding procedures. 
In December 2011, the ANAC initiated the concession process for the operation of the international airports of Guarulhos (São Paulo), Campinas/Viracopos (São Paulo), and Brasilia (Federal District). 
The auction for three airports took place simultan eously on 6 February 2012. The concession for 
the Guarulhos airport (for 20 years) was won by the Consortium Invepar-ACSA, comprising Brazilian and South African investors; the concession for the Brasilia airport was won by the 
Consortium Inframérica (for 25 years); and the concession for the Viracopos airport was granted 
(for 30 years) to the Consortium Aeroportos Brasil, comprising Brazilian and French investors. INFRAERO retained 49% of the shares in each of the concessionaries.
266 The proceeds from the 
concessions were transferred to the FNAC.  
4.216.  In December 2012, the Brazilian President announced the decision to grant the operation 
of two more airports in concession: Galeão, in Rio de Janeiro; and Confins, in Minas Gerais. As in the case of the Guarulhos, Viracopos, and Bras ilia airports, INFRAERO will keep 49% of the 
concessionaries' social capital. The bidding process is expected for the second semester of 2013. 
4.217.  The ANAC is also responsible for granting authorizations to provide air transport auxiliary 
services. Foreign airlines are automatically granted authorization to provide auxiliary services for 
their own aircraft, as long as their home country grants reciprocal treatment to Brazilian airlines. 
Operators other than airlines, domestic or foreign,  are required to set up a company in Brazil in 
order to provide auxiliary services. Domestic and foreign companies may provide aircraft 
                                               
264 US Department of Commerce (2011). 
265 Decree No. 7.205 of 10 June 2010. 
266 INFRAERO online information. Viewed at: http: //www.infraero.gov.br/index.php/br/institucional/ 
concessao-de-aeroportos.html [May 2012]. WT/TPR/S/283 • Brazil 
 
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  maintenance services in Brazil, provided they obtain a Brazilian maintenance-shop certification and 
a Certification of Approval of the Company issued by the ANAC. Brazilian airlines may contract maintenance services abroad.
267  
4.218.  The ANAC determines ceiling fees for different airport services and adjusts them 
annually.268 The concessionary airports must apply airport fees in accordance with those 
established by the ANAC. In addition, airport se rvices (e.g. take-off, landing, and parking of 
aircraft, and storage of air cargo) are subject to the Additional Airport Tax (ATAERO), applied at 
35.9% on service fees as of May 2012 under Law No. 12,648. The aviation industry considers the 
abolition of this surcharge critical for improving their competitiveness.269  
4.219.  Decree No. 7,554 of 15 August 2011, created the National Airport Authorities Commission 
(CONAERO), responsible for coordinating and organi zing the activities of all government bodies 
and agencies that operate in airports (e.g. Custom s, migration, health, etc.), and headed by the 
SAC/PR. CONAERO's objective is to improve the quality, safety, and diligence of all regulatory procedures that take place at airports, and to establish performance indicators. CONAERO is also 
responsible for designing and implementing the Na tional Programme for Air Transport Facilitation. 
With the aim of improving airport management, the same Decree created airport authorities in six of the major Brazilian airports, and authorized the CONAERO to create them in other airports. 
Currently, there are 13 airport authorities in operation.  
4.220.  Brazil did not schedule any GATS specific commitments on air transport services. 
Nevertheless, it made specific commitments on auxiliary services to all modes of transport, including handling and storage, and warehousing services. For these services, Brazil committed to 
allow commercial presence without restrictions.
270  
4.5.4  Maritime transport and ports 4.5.4.1  Main features 
4.221.  During the review period Brazil maintained a trade deficit in maritime transport services, 
which increased in tandem with the country's growing participation in international trade, especially in 2010 and 2011. In 2011, Brazil's expo rts and imports of maritime transport services 
amounted to US$4.8 billion and US$9.5 billion, respectively.  
4.222.  At end December 2011, the Brazilian-flagged navigation fleet comprised 156 ships
271, 
operated by 41 companies, with a total capaci ty of 2.9 million deadweight tonnes (DWT). Oil 
tankers represented 45.4% of tota l DWT capacity, followed by bulk carriers (18.2%), container 
ships (14%), and general cargo ships (5.6%).272 The predominance of tankers and bulk carriers in 
total DWT reflects the structure of Brazil's merchandise exports, which comprise mainly oil, iron ore, soybeans, sugar, and other commodities. It also reflects the Brazilian suppliers' need to use 
large ships to achieve economies of scale in order to remain competitive. The largest Brazilian fleet 
is owned by PETROBRAS, with 42 ships and 46.2% of total DWT, followed by NORSUL (12.3%), 
ELCANO (10.9%), Aliança Navega ção (9.5%) and Log-In (4.5%).
273  
4.223.  Although two thirds of Brazilian-owned sh ips sail under the Brazilian flag, in terms of 
tonnage (DWT) foreign-flagged (Brazilian-owned) vessels account for 83%274, with the Liberian 
flag being the most used flag.275 The Brazilian-owned fleet's market share in world tonnage is just 
below 1%, ranking 21st in the world. In the near future, however, Brazil is expected to increase its 
                                               
267 WTO (2009). 
268 The latest adjustments are contained in ANAC Resolution No. 216 of 30 January 2012. 
269 IATA, Press Release No. 18, "Urgent Change for Brazilian Aviation - Driving Economic benefits and 
Improving Competitiveness", 15 March 2011. Viewed at: http://www.iata.org/pressroom/pr/pages/2011-03-15-01.aspx [May 2012]. 
270 WTO document GATS/SC/13 of 15 April 1994. 
271 There were an additional 1,1 49 support navigation vessels. 
272 ANTAQ online information. View ed at: http://www.antaq.gov.br/Portal/pdf/BoletimPortuario/Frota 
ApoioMaritimoDez2011.pdf [June 2012]. 
273 ANTAQ online information. View ed at: http://www.antaq.gov.br/Portal/pdf/BoletimPortuario/Frota 
ApoioMaritimoDez2011.pdf [June 2012]. 
274 Vessels of 1,000 GT and above. 
275 UNCTAD (2011) and (2012). WT/TPR/S/283 • Brazil 
 
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  fleet substantially, as reflected by the country's order book, which is currently the world's 
largest.276  
4.5.4.2  Regulatory framework 4.5.4.2.1  Maritime transport services 
4.224.  Brazil's regulatory agency for maritime  services is the National Waterways Transport 
Agency (ANTAQ), a public-law independent agency linked to the Secretariat of Ports.
277 The ANTAQ 
regulates and supervises the Port Authority, the federal waterway infrastructure, private terminals 
and shipping companies.278 The ANTAQ's main functions include setting rules for the use of 
shipping services, granting authorizations for the provision of services by shipping companies, supervising the activities of all shipping companies operating in Brazil, and authorizing contracts to charter foreign vessels and for government cargo transportation.
279 The ANTAQ is also responsible 
for negotiating international maritime transport conventions and agreements.  
4.225.  Among the main legal instruments governin g maritime transportation in Brazil are: Law 
No. 9,432 of 8 January 1997, which organizes mariti me and other types of water-born transport 
services, including the conditions for the participation of foreign vessels; Law No. 7,652 
of 3 February 1998 on the registration of mariti me property; and Law No. 10,233 of 5 June 2001, 
which created the ANTAQ and established its regulatory functions. 
4.226.  Under Law No. 9,432, Brazilian-flag vessels must be owned by natural persons residing or 
domiciled in Brazil, or by a Brazilian shipping company. The captain, the chief engineer and two-
thirds of the crew of a Brazilian-flag vessel must be Brazilian nationals. To obtain authorization from the ANTAQ to operate as a Brazilian shipping company, an enterprise must be established in 
Brazil under Brazilian law, and own at least one ship technically adequate for the service 
envisaged. There are no restrictions on the nati onal origin of the capital. Under Law No. 7,652, 
Brazilian ships must be registered in the Registry of Maritime Property. Ships under construction in 
a shipyard located in Brazil may be registered in the Special Brazilian Registry (REB), and hence 
be eligible for incentives aimed at fostering the development of the national shipbuilding industry (see below).
280  
4.227.  Multimodal freight transport is regulated by Law No. 9,611 of 19 February 1998 and 
Decree No. 3,411. No restrictions apply on the origin of capital for the establishment of a multimodal transport operator in Brazil. 
4.228.  The Brazilian Constitution and Law No. 9, 432 require reciprocity of treatment in Brazilian 
international maritime transport services, as specified in international agreements signed by 
Brazil.
281 As of March 2013, Brazil had bilateral agreements on maritime transport services with 
13 countries282, of which five (with Argentina, Algeria, Chile, Romania, and Uruguay) had cargo-
sharing provisions.  
4.229.  Under Decree Law No. 666 of 2 July 1969, ca rgoes of government entities (including public 
enterprises), and goods benefitting  from official fiscal or credit programmes must be transported 
by Brazilian flag vessels, unless a waiver is granted on a reciprocal basis. Exports of crude oil 
extracted in Brazil must also be transported by  Brazilian-flag vessels. Up to 50% of government-
controlled cargoes may be allocated to vessels bear ing the flag of the importing/exporting country, 
subject to reciprocity. When no Brazilian vessel is available or rates are not deemed reasonable, a 
waiver may be given for a foreign vessel. The authorities indicated that 5,350 waivers were 
granted to foreign vessels to perform freight transport between 2008 and 2011.  
                                               
276 For example, the Brazilian mining  conglomerate is expected to take delivery of 35 of the largest 
existing cargo ships (with a capacity of up to 400,000 DWT) by the end of 2013 (UNCTAD, 2012). 
277 ANTAQ was created by Law No. 10,233 of 5 June 2001, modified by Provisional Measure No. 595 of 
6 December 2012. 
278 ANTAQ online information. Viewed at: http: //www.antaq.gov.br/Portal /pdf/palestras/Marrocos 
ANTAQ2010Mar09DGTiagoLimaIngCompatibilityMode.pdf [June 2012]. 
279 WTO (2009). 
280 Law No. 9,432 of 8 January 1997. 
281 Article 178 of the Constitution and Article 5 of Law No. 9,432 of 8 January 1997. 
282 Algeria, Argentina, Bulgaria, Ch ile, China, France, Germany, Pola nd, Portugal, Romania, Russia, the 
United States, and Uruguay. WT/TPR/S/283 • Brazil 
 
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  4.230.  Cabotage is reserved for Brazilian-flag vessels operated by Brazilian shipping companies. 
Foreign vessels may only participate in cabotage when chartered by a Brazilian shipping company, for which an authorization must be obtained. Authorizations waiving this restriction may be granted when: a Brazilian-flag vessel of the required type is not available; for public interest 
reasons; or if the foreign vessel substitutes for a vessel that is under construction in a Brazilian 
shipyard.
283 Between 2008 and 2011, 5,434 such waivers we re granted, mainly due to the lack of 
availability of Brazilian-flag vessels.284  
4.231.  Brazil still maintains the Additional Freight Charge for the Renovation of the Merchant Navy 
(AFRMM), a federal tax levied on maritime freight.285 The tax is applied on the combined cost of 
freight and insurance at a rate of 25% for long-distance navigation (international routes) by Brazilian and foreign ships, 10% for cabotage navigation, and 40% for inland waterway 
transportation of liquid bulk cargoes in Brazil's north and north-east regions. The AFRMM is levied 
only on import cargos; transit and export cargos are exempted. The tax does not apply to countries with which Brazil has negotiated a specific clause in LAIA Economic Complementary 
Agreements. The AFRMM on international maritime freight may increase the cost of imported 
goods considerably.  
4.232.  Resources from the collection of the AFRMM are deposited in the Merchant Marine Fund 
(FMM) to finance the development of the Brazilian merchant fleet and shipyard industry. The 
BNDES is in charge of managing the fund, on behalf of the Ministry of  Transport; it offers credits at 
attractive rates to Brazilian shipping companies ordering ships from Brazilian shipyards and to Brazilian shipbuilders producing vessels for Brazilian shipping companies. Central Bank Resolution 
BACEN No. 3828 of 17 December 2009 establishes the conditions applicable to credits granted 
with resources from the FMM. The conditions depend on the amount of "national content" used in the production of the vessels or in the construction, expansion, and modernization of shipyards; 
the origin of the goods or equipment to be financed; and the type of vessel (cargo, passengers, 
etc.). The authorities indicated that the FMM allocated a total of R$9.3 billion in credits to the shipping industry between 2008 and 2011.
286 
4.233.  The Brazilian shipping industry also benefits from other tax incentives related to the 
provision of services. Freight revenues from good s carried between Brazil and a foreign country by 
vessels registered under the REB are exempt from  the Contribution to the Social Integration 
Programme (PIS) and the Contribution to the Social Security Financing (COFINS).287 The 
construction, maintenance, repair, and modernization of vessels registered under the REB in 
Brazilian shipyards enjoy the same fiscal treatment as exports of industrial goods in general, e.g. reimbursement of domestic indirect taxes. Moreover, in some states, inputs and other materials 
for the construction of ships and petroleum platfo rms are exempt from the Tax on the Circulation 
of Goods and Services (ICMS).
288  
4.234.  The Brazilian Income Tax Code (Article 176) and Decree Law No. 5,844 of 1943 
(Article 30) grant reciprocal income tax exemption to foreign shipping companies domiciled in 
countries where Brazilian shipping companies benefit from the same treatment for international shipping traffic activities. 
4.235.  Brazil signed the UN Convention on a Co de of Conduct for Liner Conferences in 1975, but 
did not ratify it.
289 Brazil is a member of the International Maritime Organization (IMO) and has 
ratified a number of IMO conventions related to ma ritime safety, prevention of maritime pollution, 
                                               
283 Articles 7 and 9 of Law No. 9,432 of 8 January 1997. 
284 ANTAQ (2011). 
285 Law No. 10,893 of 13 July 2004 governs the AFRMM. Law No. 12,599 of 2012 clarified that the 
AFRMM is a tax, not a customs duty, th at must be included fo r purposes of determining the sales tax (ICMS) 
on imports. 
286 BANCEN Resolution No 3828 of 17 December 2009. Viewed at: http://www.siop.planejamento. 
gov.br/sioplegis/pesquisa.php?query=%22Fundo+da +Marinha+Mercante+%22&index=101173 [March 2013]. 
287 Provisional measure No. 2,158-35 of 4 August 2001. 
288 Decree No. 25.403 of 2 July 1999. 
289 Brazil signed the UN Convention on a Code of Conduct for Liner Conferences on 23 June 1975. UN 
online information. Viewed at: h ttp://treaties.un.org/pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XII-
6&chapter=12&lang=en#EndDec [July 2012]. WT/TPR/S/283 • Brazil 
 
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  and civil liability, among others.290 Brazil is a party to the Multilateral Agreement on Inland 
Waterway Transportation through the Paraguay-Parana Rivers, together with Argentina, the Plurinational State of Bolivia, Paraguay, and Uruguay.  
4.5.4.2.2  Ports 
4.236.  Brazil has 35 maritime public ports under the jurisdiction of the federal Special Ports 
Secretariat (SEP), of which 17 are operated by State or municipal governments, and 18 are administered by the public-owned Companhia Docas. No public ports are operated under private 
concessions.
291 There are 134 private terminals (TUPs).  
4.237.  The main Brazilian ports in terms of ca rgo handled are TUP Tubarão (State of Espírito 
Santo), Ponta da Madeira (State of Maranhão), Sant os (State of São Paulo), Itaguaí (State of Rio 
de Janeiro), TUP Almirante Barroso (State of São Paulo), and TUP Almirante Maximiano da Fonseca 
(State of Rio de Janeiro), which accounted for over 50% of total cargo movements in Brazilian 
ports in 2011 (Table 4.9). Some of these ports and terminals specialize in the shipment of a single commodity (e.g., mineral ore in the ports of Ponta da Madeira and Tubarão). The Port of Santos 
handles all forms of cargo and is the main port for general cargo and container traffic. 
Table 4.9 Main Brazilian ports, cargo movement (tonnes), 2008-11  
Port / Private-use terminal 2008  2009  2010 2011 2011  
(%) 
TUP CVRD TUBARÃO-ES 99,873,293 83,834,676 107,760,287 110,143,415 12.43 
TUP PONTA DA MADEIRA-MA 86,902,994 87,716,016 96,364,127 102,260,814 11.54 
PORTO DE SANTOS-SP 74,773,066 75,641,825 85,401,154 85,995,109 9.71 
PORTO DE ITAGUAÍ-RJ 47,217,575 49,755,062 52,765,505 58,131,045 6.56 
TUP ALMIRANTE BARROSO-SP 47,545,587 49,515,291 47,071,199 49,694,696 5.61 
TUP ALMIRANTE MAXIMIANO DA 
FONSECA-RJ 30,195,739 35,417,192 39,612,657 38,783,547 4.38 
TUP MBR-RJ 37,670,757 36,664,915 37,718,177 37,526,187 4.23 
PORTO DE PARANAGUÁ-PR 32,274,468 30,630,149 34,348,405 37,418,523 4.22 
TUP PONTA DE UBU-ES 17,660,461 19,084,850 23,005,992 23,703,579 2.67 
TUP MADRE DE DEUS-BA 21,845,233 15,703,512 20,267,441 20,701,120 2.34 
Other ports/private-use terminals 272,364,377 248,967,653 289,620,792 321,697,245 36.31 
Total 768,323,550 732,931,141 833,935,736 886,055,280 100.00 
Source: ANTAQ, Agéncia Nacional de Transportes Aquavi árias (2011), "Anuário Estatístico Aquaviário 2011". 
Viewed at: http://www.antaq.gov.br/Portal/Anuarios/Anuario2011/body/index.htm [July 2012]. 
4.238.  During the period under review (except in 2009), port cargo movement continued to 
increase, reflecting the growth of Brazil's exte rnal trade. Between 2007 and 2012, the volume of 
cargo moved through Brazilian ports rose from 755 million tonnes to 904 million tonnes. Private 
terminals handled about 65% of total cargo movements in 2012. The main products transported 
were commodities, including iron ore, petroleum and petroleum products, soybeans, bauxite, 
sugar, fertilizers, and coal, which together accounted for almost three quarters of all cargo moved in 2012.
292  
4.239.  Around 90% of Brazilian exports are carri ed by sea, and, as Brazilian overseas trade 
expands, the country's ports are facing serious ca pacity and operational constraints. According to 
the General Port Concession Plan (PGO), which establishes the procedures for public port concessions, there are 19 potential areas for building new ports in Brazil. Their construction would 
help to meet increasing demand.
293 In addition, the two major sporting events that Brazil will be 
hosting in the next few years are placing further strains on existing port and terminal capacity. In order to address such bottlenecks, the federal Government allocated nearly US$2 billion for 
improvements in a dozen ports under the first phase of the Growth Acceleration Plan/PAC-1 
                                               
290 For the list of international maritime transpor t conventions signed by Brazil, see: https://www. 
ccaimo.mar.mil.br/convencoes_e_codigos/convencoes [July 2012]. 
291 Information provided by the Brazilian authorities. Se e also Secretaria de Port os online information. 
Viewed at: http://www.portosdobrasil.gov.br/sistema-portuario-nacional. 
292 ANTAQ online information. Viewed at http://www.antaq.gov.br/Portal/Anuarios/Anuario2011 
[July 2012]. 
293 Brazil's public ports are expected to move a billion tonnes of freight by 2015. WT/TPR/S/283 • Brazil 
 
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  (2007-11). A further US$3 billion has been earmarked for dredging, port infrastructure, port 
logistics, and passenger terminals under the PAC-2 programme.  
4.240.  As of March 2013, the main instrument regulating port activities is Provisional Measure 
No. 595 of 6 December 2012, which revoked Law No. 8,630 of 25 February 1993 (Port 
Modernization Law). Provisional Measure No. 595 maintains a decentralized system of port 
administration (at federal, state, and municipal level) and allows the leasing of public ports areas and facilities to the private sector, including foreign companies. Federal Decree No. 4,391 of 2002 
established procedures and conditions for the leasing of areas at public ports. Many activities in 
the public ports are now carried out by private local and foreign companies under leasing contracts, which have an initial duration of 25 years, renewable for a further 25 years. Firms 
supplying auxiliary port services must be established in Brazil, but foreign capital may participate 
and receive national treatment. A number of activities in the public ports are still regulated by the 
State, and union labour must be used in the pu blic ports. Under the new legislation, the Port 
Authority Council, comprising representatives from business, labour, and government, has shifted 
from being a decision-making body, responsible for re gulating port operations, to an advisory body 
of the port administration.  
4.241.  Law No. 11,518 of 5 September 2007 provides for the creation of the Secretariat of Ports 
(SEP), directly linked to the Presidency, with th e objectives of increasing the competitiveness of 
Brazilian ports and reducing logistic costs. SEP's responsibilities include policy formulation for the development of the sector; implementation of  measures and programmes to support port 
infrastructure development with investments from the PAC programme; participation in planning 
and approval of ports concessions; consolidatio n of the regulatory framework; and promoting 
private investment. The SEP is currently working on  the National Logistics and Ports Plan (PNLP). 
The SEP nominates the presidents of the Port Authority Councils and of the publicly-owned 
Companhia Docas, which also participates in the Port Authority Councils.  
4.242.  Federal Decree No. 6,628 of 2008 established regulations for the private-use-terminals 
(TUPs), while preserving the leasing programme of areas at public ports. Many companies operate 
private terminals, mostly used for exporting th eir own cargos, and new terminals are being built. 
According to the industry, regulations for the esta blishment of private terminals are complex (e.g. 
regarding the definition of own and mixed cargos ), and there is a requirement that even the 
development of an approved private terminal shou ld be open to tender regulated by the ANTAQ.
294 
Nevertheless, two major private port developments are in progress: Embraport, close to the port 
of Santos (for handling containers and ethanol), an d Açu Superport, north of Rio de Janeiro, which 
will be a major shipping route to China and will  include processing and production facilities. 
4.243.  In addition to increased investment in ports infrastructure, certain operational issues need 
to be addressed to maximize the efficiency and co mpetitiveness of ports. For example, prices for 
port services continue to vary considerably from port to port making comparisons difficult. Private 
terminal prices are not subject to SEP control. Also, shipping companies must submit more than 
100 documents to more than 20 institutions in order to carry out operations. Representatives of the industry advocate unifying the pricing st ructure, so as to boost competition, and 
simplifying/reducting documentation and procedural requirements.
295  
4.244.  To simplify port procedures, the Federal Government is implementing the Paperless Ports 
programme. Among other facilitation measures, the programme includes a computerized system that unifies all relevant databases so that companies need to complete only one form, which can 
be accessed by all agencies involved in shipme nt or release of cargo. This system has been 
deployed in 19 ports, including some of the main on es and is expected to be deployed in 15 others 
by mid-2013. As part of the same programme, the SEP is working with a private corporation on 
the Brazil Intelligent Cargo projet in order to assess how enhanced business processes, 
technologies, and best practices can be used to impr ove the security and efficiency of Brazil's port 
and logistics operations, and reduce docking and cargo clearance times and costs.  
4.245.  Brazil maintains a lighthouse fee (TUF) applied only on foreign vessels, each time a foreign 
ship uses a port in a different Brazilian State. The fee is applied according to dead weight tonnage 
                                               
294 UK Trade and Investment (2011). 
295 InfoSur online information, "Brazil: Ports oper ating at their limit", 2 August 2011. Viewed at 
http://infosurhoy.com/coccon/saii/xhtml/en_GB/features/saii/features/main/2011/02/08 [July 2012]. WT/TPR/S/283 • Brazil 
 
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  (DWT) at the following rates: US$1,500 for vessels from 1,000 to 50,000 DWT; US$2,250 for 
vessels from 50,000 to 100,000 DWT; and US$3,000 for vessels of over 100,000 DWT. Vessels under 1,000 DWT are exempted from the fee. The revenue collected is used for repair and maintenance of navigation signals (e.g. lighthouses) along the Brazilian coast, with a view to 
maintaining safety levels for navigation in Brazilian territorial seawaters. The authorities indicated 
that TUF amounts to roughly US$40 million a year.   
4.246.  Brazil continues to implement security meas ures in national ports to comply with the IMO's 
International Ship and Port Facility Security Code (ISPS Code). As at August 2012, 24 Brazilian 
ports had been certified under the ISPS Code.  
4.5.5  Professional services  4.5.5.1  General features 
4.247.  Brazil maintained a positive trade balance in professional and business services throughout 
the period under review. Exports increased rapidly, to US$18.3 billion in 2011, while imports amounted to US$7.6 billion. 
4.248.  Under the Brazilian Constitution, the Union has exclusive powers to regulate the practice of 
professions.
296 Registration in professional associations is mandatory for the provision of certain 
services, such as legal, accounting, architectural,  and engineering. No professions are reserved for 
Brazilian nationals, but practice of the legal, medical, health, and other professions requires 
residence in Brazil. Foreign providers are not allowed to own or manage companies specialized in investigation and security services. 
4.249.  Professionals with foreign qualifications must obtain revalidation of their degrees from a 
university recognized by the Ministry of Educatio n, and meet the requirements established by law 
to practise in Brazil. The National Education Council of the Ministry of Education, through Resolution No. 1 of 28 January 2002, as modified by  Resolution No. 8 of 4 October 2007, regulates 
the revalidation of foreign diplomas, titles, and certificates. The request for revalidation must be 
submitted to a recognized Brazilian university.
297 The degree is assessed by a special commission 
from the university. By law, recognized universities have complete autonomy in the assessment 
and validation of foreign degrees298, and have their own criteria, which may include analysis of the 
curriculum, a test or even the demand that the applicant sit some extra courses in Brazil. In practice, procedures for revalidation of foreign diplomas are complex and time consuming. The National Education Council is currently reviewing revalidation rules in order to speed up the 
process.
299  
4.250.  Within the MERCOSUR, Decision No. 25/2003 established a regulatory framework to 
engage in mutual career recognition among member countries. The National Education Council 
Resolution No. 106 of 2007 provides for the impl ementation of Decision No. 25/2003 in Brazil. 
However, the decision has not been implemented, pending approval by other MERCOSUR members.  
4.5.5.2  Legal services 
4.251.  Law No. 8,906 of 4 July 1994 (as amended)  governs the practice of law in Brazil. The 
Brazilian Bar Association (OAB), an independent private institution, regulates and sets the standards of conduct and qualifications for the legal profession at the federal level, and has the 
exclusive authority to admit and discipline attorn eys. The OAB has 27 sectional councils located in 
each of the Brazilian federative units, and toge ther they constitute the Federal Council of the 
                                               
296 Article 22 of the Constitution. 
297 For a list of the required docume nts and procedures (in Portuguese), see Ministry of Education online 
information. Viewed at: http://portal.mec.gov.br/i ndex.php?option=com_content&view=article&id=12405: 
revalidacao-de-diploma-graducao&catid=322:revalidacao-de-diploma-graduacao&Itemid=317 [July 2012]. 
298 Article 207 of the Constitution and Law for Guidelines and Bases for National Education No. 9,394 of 
20 December 1996. 
299 Brazil-Arab New Agency, "Brazil: National Education Council aims to  speed up validation of foreign 
diplomas", 24 June 2011. Viewed at http://www2.anba.com.br/noticia-educacao.kmf?cod=12047050 [July 2012]. WT/TPR/S/283 • Brazil 
 
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  Brazilian Bar Association, the highest-ranking body  regulating the legal profession. Currently, over 
600,000 lawyers are registered with the OAB.  
4.252.  Under Law No. 8,906 of 1994, the practice of law encompasses legal consulting, advisory, 
and management, and pleading before the Brazilian Judiciary branch. Only lawyers registered with 
the OAB may receive the title of attorney and pe rform such activities in Brazil. Individuals 
(Brazilian and foreign) who have obtained a law degree abroad may be admitted to practise law in 
Brazil as attorneys, provided they validate their law degree at an authorized Brazilian law school, 
pass the OAB Bar exam, and register with the OAB. Practice as a legal professional also requires 
residence in Brazil. An attorney's main registration must be at the sectional council of the federative unit where he/she intends to establish professional domicile. The licence to practise law as an attorney is valid for an indefinite term and the attorneys are allowed to practice Brazilian 
law. 
4.253.  Foreign-qualified lawyers may also practise in Brazil as foreign law consultants. Provision 
No. 91 of 13 March 2000 allows a foreign lawyer to establish a consultancy in foreign law in Brazil. 
In this case, the foreign lawyer is not required to validate his/her law degree or to pass the Bar 
exam. However, OAB authorization and registrati on are required and are granted for renewable 
periods of three years. The requirements to obtain a licence as a foreign law consultant include: to 
be licensed to practise law and be admitted to the Bar in the country of qualification, to hold a 
permanent visa in Brazil, to provide evidence of  good conduct and reputation, of never having 
been punished for a disciplinary violation or convicted in a criminal lawsuit, and proof that there is an instrument offering reciprocal treatment to Brazilian attorneys in the applicant's country of 
origin. Foreign law consultants are forbidden from offering consultancy services or counselling in 
Brazilian law and from exercising the function of  an attorney-at-law. They are only allowed to 
provide consultancy on the foreign law of the coun try where they are licensed to practise law. 
Provision No. 99 of 2002 established a Registry of Foreign Law Consultants.  
4.254.  A consultancy firm providing foreign law services must be constituted and registered in 
Brazil, and all its lawyers must be authorized by the OAB to provide foreign law consultancy 
services. A foreign law consultancy firm may not enter into partnership with a Brazilian attorney 
practicing Brazilian law or hire Brazilian lawyers, except as foreign law consultants. Currently, some 20 foreign law firms are registered with the OAB, of which more than half are organized in São Paulo and the rest in Rio de Janeiro.  
4.255.  Cross-jurisdictional legal work is strictly regulated, and reportedly in recent years, the OAB 
has investigated affiliations between Brazilian law firms and foreign law consultants in Brazil. According to the OAB, Brazilian attorneys and foreign law consultants may not enter into 
partnership within a single legal entity.  Therefore, a law firm in Brazil shall be established only by 
attorneys licensed by the OAB and is allowed to practise Brazilian law;  while a foreign law 
consultancy firm shall be established only by foreign law consultants, who are authorized to 
provide counselling only on the foreign law(s) for which they are licensed by the bar association in 
their country (or countries) of origin.
300  
4.5.5.3  Accounting and auditing services 4.256.  The accounting profession is regulated by the Federal Accounting Council (CFC). The CFC is 
in charge of issuing, regulating, and implementing accounting principles, technical qualification 
requirements, and continuous educational programmes for accountants. It is also responsible for compiling and updating the Brazilian Rules of Accountancy. Established by Decree-Law No. 9,295 
of 27 May 1946, the CFC is a special corporative body of public law.
301 It comprises one 
representative from each of the 27 Regional Acco unting Councils (CRCs). The CRCs are responsible 
for implementating the CFC Directives and for the registration and supervision of accountants in 
their respective jurisdictions. CFC Resolution No. 1,370 of December 2011, which repealed CFC 
                                               
300 Law.com-Internationalnews,  "Foreign Law Firms' Operation in Brazil, 2012". Viewed at: 
http://www.law.com/sp/law/international/LawArticleFreindlyIntl.jsp?id=1202473434; The Law Gazette , "A 
coming struggle on partnership with foreign lawyers", 24 February 2012. Viewed at: http://www.lawgazette. 
co.uk/print/64424; and The Economist , "Foreign law firms in Brazil. Keep out", 23 June 2011. Viewed at: 
http//www.economist.com/node/18867851 [July 2012]. 
301 CFC online information. Viewed at: http://www.cfc.org.br/conteudo.aspx?codMenu=1 [July 2012]. WT/TPR/S/283 • Brazil 
 
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  Resolution No. 960/2003, established a new Gene ral Regulation for Accounting Councils, which 
spells out rules on the composition, election, mandate, powers, and resources of the CRCs.  
4.257.  At end 2011, there were 493,000 accounting professionals in Brazil of which 488,000 were 
registered. There were also 78,970 accounting organizations registered with CFC.302  
4.258.  Brazilian legislation makes a distinction between professional accountants, who require a 
university degree, and accounting technicians.303 Under Law No. 12,249 of 14 June 2010, in order 
to practise as a professional accountant, an individual must possess a bachelor's degree in 
accountancy recognized by the Ministry of Educat ion, have passed the CFC Sufficiency Exam, and 
be registered with the relevant CRC. Accountants who wish to practise as independent auditors must pass a technical qualifications exam to be enrolled in the National Registry of Independent Auditors (CNAI) of the Federal Accounting Council. Au ditors wishing to act in the area of securities 
must also register at the Brazilian Securities Exchange Commission (CVM). Moreover, an 
accountant wishing to audit financial institutions or private insurers must pass, in addition to the general technical qualification exam, an exam for auditing institutions regulated by the Central 
Bank, or an exam for auditing institutions regulated by the private insurance supervisor (SUSEP).  
4.259.  In order to practise accountancy in Braz il, any individual holding an accountancy degree 
from a foreign university must first revalidate his or her diploma in a Brazilian public university 
with a full accountancy graduation course. Requirements set by the Brazilian university may 
include the presentation of an official translation of the foreign diploma into Portuguese, and attendance of additional classes by the diploma’ s holder to become acquainted with Brazilian 
accountancy standards. After passing the CFC Suffic iency Exam, professional registration with the 
local CRC is required. In the case of foreigners, registration is conditional on the duration of their 
work visa in Brazil. 
4.260.  During the review period, Brazil proceeded  with the gradual adoption of the International 
Financial Reporting Standards (IFRS), as provided for by Law No. 11,638/07 dealing with Brazilian 
corporations. The deadline for full compliance was 31 December 2010. Since then, all companies listed on the Brazilian Stock Exchange as well as financial institutions have been required to 
produce financial statements that meet IFRS stan dards. A simpler version of the IFRS has also 
been introduced for SMEs. This has meant a significant change from the old Brazilian accounting system which was focused primarily on taxes, rather than on financial management. The transition process was carried out under the direction of the FCF Accounting Standards Committee. It is 
expected that, by improving the quality of financia l reporting, the adoption of the IFRS standards 
will facilitate access to international credit and attract investments.  
4.261.  In December 2011, the CFC, the Brazilian Accounting Foundation, and the American 
Institute of Certified Public Accountants (AICPA) signed a memorandum of understanding intended 
to strengthen the accounting profession in Brazil and the United States. Among other issues, the parties will establish working groups for the launch and administration of the CPA exam in Brazil, 
and seek to implement a Portuguese-language IFRS training programme in Brazil.
304 
4.5.5.4  Architectural and urban planning services 
4.262.  Law No. 12,378 of 31 December 2010, which revoked all related previous legislation, 
governs the practice of architects and urban pla nners. The law created the Council of Architecture 
and Urbanism of Brazil (CAU/BR) at the national level, and the Councils of Architecture and 
U r b a n i s m  ( C A U / U F )  i n  e a c h  o f  t h e  f e d e r a t i v e  units, which are responsible for overseeing the 
exercise of these professions.305 Architects, urban planners, and engineer-architects who were 
enrolled under the old registry system (CONFEA) , are now registered with the CAUs under the 
single title of architect and urban planner.  
                                               
302 Journal of Accountancy  online information. Viewed at: http ://www.journalofaccountancy.com/Issues/ 
2011/Nov/20114143.htm [July 2012]. 
303 WTO document S/WPPS/W/7/Add.22, 5 November 1996. 
304 AICPA online information. Viewed at: http:// www.aicpa.org/Press/PressReleases/2011/Pages/AICPA-
and-Brazilian-Accounting-Bodies-agree-on -Memorandum-of-Understanding/ [July 2012]. 
305 Previously, the professions of architect and engi neer were regulated by the Federal Council of 
Engineering, Architecture and Agronomy (CONFEA), and th e Regional Councils of Engineering, Architecture and 
Agronomy (CREAS). WT/TPR/S/283 • Brazil 
 
- 172 - 
 
  4.263.  Registration with the relevant CAU/UF is mandatory in order to use the title of, and 
exercise the profession of, architect and urban planner. Registration is valid throughout the 
national territory. Brazilian citizens and foreigners holding a permanent visa, who have a university degree in architecture and urban planning from an officially recognized Brazilian institution, may 
obtain CAU/UF registration, provided they meet the requirements set out in CAU Resolution 
No. 18 of 2 March 2012. Brazilians and foreign in dividuals holding a permanent visa, who possess 
a university diploma from a foreign institution may register with the relevant CAU/UF, provided 
their diploma is duly legalized by the competent Brazilian consulate and revalidated by an 
authorized institution in Brazil (CAU Resolution No. 26 of 6 June 2012).  
4.264.  Temporary registration may be granted to Brazilian and foreign architects in possession of 
a foreign diploma and a temporary work contract in  Brazil. In this case, validation of the foreign 
diploma is not required, but it must be issued by an institution officially recognized in the country 
where it is located. The temporary registration is valid for the duration of the contract and only for the activities therein specified; proof of residency in Brazil is required (CAU Resolution 
No. 26 of 6 June 2012). Exceptionally, foreign prof essionals with no permanent residency in Brazil 
may obtain temporary registration, provided they ar e accompanied in all the professional activities 
they perform by a registered Brazilian architect or  registered architect association with residency 
in Brazil.
306  
4.265.  CAU registration is also mandatory for en terprises or associations providing architectural 
and urban planning services, either as their sole commercial purpose or in combination with other professional services. Such juridical persons must include among their staff at least one 
professional architect or urban planner. CAU Resolution No. 15 of 3 February 2012 sets out the 
requirements for the registration of juridical persons with the CAU/UF, including the company's 
constitutive act and proof of inscription in the national registry of juridical persons with the fiscal 
authorities. In order to establish a commercial presence in Brazil to provide architectural and 
urban planning services, a foreign juridical person must form a partnership ( consórcio ) with a 
Brazilian architect firm.  
                                               
306 Article 6 of Law No. 12,378 of 31 December 2010. WT/TPR/S/283 • Brazil 
 
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Abimaq (2010), Impacto do "custo Brasil" na competitividade da indústria brasileira de bens de 
capital . Viewed at: http://www.abim aq.org.br/Arquivos/Html/DE EE/Custo%20Brasil%20de%20BK 
%20caderno%2031mar10.pdf. 
ANAC (2010), Anuario do Transporte Aéreo 2010 .  Viewed at:  http://www2.anac.gov.br/ 
estatistica/anuarios.asp.  
ANP (2012), Anuário Estatístico Brasileiro do Petróleo, Gás Natural e Biocombustíveis . Viewed at: 
http://www.anp.gov.br /?pg=60983#Se__o_1. 
ANTAQ (2011), Panormama da Navegação Marítima e de Apoio . Viewed at: http://www.antaq.gov. 
br/portal/pdf/BoletimPortuario/PanoramaNavegacaoMaritimaApoio2011.pdf. 
Central Bank of Brazil (2007), Relatório Anual 2007. Viewed at: http://www.bc.gov.br/ 
?BOLETIMANO.  
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brazil_agricultural_policies_web.pdf. 
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http://www.agricultura.gov.br/politica- agricola/seguro-rural/relatorios. WT/TPR/S/283 • Brazil 
 
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pr.gov.br/arquivos/File/deral/psafra_ag_familiar_2010_11.pdf. 
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ContasAnuais/relatorio_gestao_fndct_2011.pdf. 
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com.br/rs2011/downloads/RS_portugu%C 3%AAs_online_p%C3%A1gina%20dupla.pdf. 
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at: http://www.suframa.gov.br/download/indicadores/RelatorioIndicadoresDesempenho_9_2012-05_11_2012-08_34_23.pdf. 
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_June-07-2011(editor+ clean).pdf. 
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data_e.htm Rankings are based on data excluding intra-EU trade. WT/TPR/S/283 • Brazil 
 
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  GLOSSARY 
ABC, Agência Brasileira de Cooperação Brazilian Agency for Co-Operation 
Plano ABC, Plano de Agricultura de Baixa 
Emissão de Carbono Plan ABC, Plan for Low Carbon Emissions in 
Agriculture 
Programa ABC, Programa de Agricultura de 
Baixa Emissão de Carbono ABC Programme, Low Carbon Agriculture 
Programme 
ABGF, Agência Brasileira Gestora de Fundos e 
Garantias S.A.; Agência Brasileira Gestora de 
Fundos Garantidores e Garantias  Brazilian Funds and Guarantees Management 
Agency (pre August 2012); Brazilian Guarantee 
Fund and Guarantees Management Agency 
(post August 2012 ) 
ABNT, Associação Brasileira de Normas Técnicas Brazilian Association for Technical 
Standardization 
ACC, Adiantamentos sobre Contratos de Câmbio Advance on Export Contracts 
ACE, Adiantamentos sobre Cambiais Entregues Advance on Exchange Contracts 
ACL, Ambiente de Contratação Livre Free Contracting Environment 
ACR, Ambiente de Contratação Regulada Regulated Contracting Environment 
AFRMM, Adicional ao Frete para Renovação da 
Marinha Mercante Additional Freight Charge for the Renovation of 
the Merchant Navy 
AGF, Aquisição do Governo Federal Federal Government Acquisition Programme 
AMAZUL, Amazônia Azul Tecnologias de Defesa 
S.A. Blue Amazonia Defence Technologies 
ANAC, Agência Nacional de Aviação Civil National Agency for Civil Aviation 
ANATEL, Agência Nacional de Telecomunicações  National Telecommunications Agency  
ANEEL, Agência Nacional de Energia Eléctrica National Agency for Electrical Energy 
ANP, Agência Nacional do Petróleo, Gás Natural 
e Biocombustíveis National Agency for Petroleum, Natural Gas and 
Biofuels 
ANS, Agência Nacional de Saúde Suplementar National Regulatory Agency for Private Health 
Insurance and Plans 
ANVISA, Agência Nacional de Vigilância 
Sanitária Brazilian Health Surveillance Agency 
APEX-Brasil, Agência Brasileira de Promoção de Exportações e Investimentos Brazilian Trade and Investment Promotion 
Agency 
ATAERO, Adicional de Tarifa Aeronáutica Additional Airport Tax 
ATER, Assistência Técnica e Extensão Rural Rural Extension and Technical Assistance 
ATIT, Acordo de Transporte Internacional 
Terrestre International Land Transport Agreement of the 
Southern Cone 
BASA, Banco da Amazônia Amazônia Bank 
BB-agroindustrial Banco do Brasil Credit Line for Agri-Industries 
BCB, Banco Central do Brasil Central Bank of Brazil 
BK, Lista de Convergência de Bens de Capital  List of Convergence for Capital Goods 
BM&F BOVESPA, Bolsa de Valores, Mercadorias 
& Futuros de São Paulo  Sâo Paulo Stock Exchange 
BNB, Banco do Nordeste do Brasil Bank of the North-East of Brazil 
BNDES, Banco Nacional de Desenvolvimento 
Econômico e Social National Development Bank 
CADE, Conselho Administrativo de Defesa 
Econômica Administrative Council for Economic Defence 
CAMEX, Câmara de Comércio Exterior Chamber of Foreign Trade 
CAPES, Coordenação de Aperfeiçoamento de 
Pessoal de Nível Superior Foundation for Higher Education Professionals 
CBA, Código Brasileiro de Aeronáutica Brazilian Aeronautical Code 
CBIT, Capacitação e Competitividade do Setor 
de Informática e Automação Capacity Building and Competitiveness 
Enhancement in Information Technology 
CCEE, Câmara de Comercialização de Energia 
Elétrica Electric Energy Commercialization Chamber 
CDE, Conta de Desenvolvimento Energético Energy Development Fund 
CDI, Certificado de Depósito Certificate of Deposit 
CEF, Caixa Econômica Federal Federal Savings Bank 
CEITEC, Centro Nacional de Tecnologia 
Eletrônica Avançada S.A. National Center for Advanced Research in 
Electronics 
CERAD, Centro Nacional de Gestão de Riscos National Centre for Customs Risk Management WT/TPR/S/283 • Brazil 
 
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  Aduaneiros 
CFC, Conselho Federal de Contabilidade Federal Accounting Council 
CGCRE, Coordenação Geral de Acreditação General Coordination for  
CGSAP, Coordenação Geral de Sanidade 
Pesqueira General Coordination Office for Aquatic Animal 
Health 
CIBES, Comissão Interministerial de Bens 
Sensíveis Inter-Ministerial Commission for the Export 
Control of Sensitive Goods 
CIDE, Contribuição de Incidência sobre o Domínio Econômico Contribution for Intervention in the Economic 
Domain 
CIMA, Conselho Interministerial do Açúcar e do 
Álcool Inter-Ministerial Council for Sugar and Alcohol 
CMC (GMC), Conselho Mercado Comum Council for the Common Market 
CMED, Câmara de Regulação do Mercado de 
Medicamentos Drug Market Regulation Chamber 
CMN, Conselho Monetário Nacional National Monetary Council 
CMSE, Comitê de Monitoramento do Setor 
Elétrico Electricity Industry Monitoring Committee 
CNAI, Conselho Nacional de Autores 
Independentes National Registry of Independent Auditors 
CNEN, Comissão Nacional de Energia Nuclear  National Commission of Nuclear Energy 
CNI, Confederação Nacional da Indústria National Industry Confederation 
CNJ, Conselho Nacional de Justiça National Justice Council 
CNSP, Conselho Nacional de Seguros Privados National Council of Private Insurance 
COBRA, Computadores e Sistemas Brasileiros  Brazilian Computers and Systems 
CODEFAT, Conselho Deliberativo do Fundo de 
Amparo ao Trabalhador Deliberative Council of the Workers' Assistance 
Fund 
COFIG, Comité de Financiamento e Garantia das 
Exportações Export Financing and Guarantee Committee 
COFINS, Contribuição para o Financiamento da 
Seguridade Social Contribution to Social Security Financing  
CONAB, Companhia Nacion al de Abastecimento  National Food Supply Company  
COMAER, Comando Aéreo Aeronautics Command 
CONAERO, Comissão Nacional de Autoridades 
Aeroportuárias National Airport Authorities Commission 
COMEXE Army Command, Ministry of Defence 
CONEX CAMEX Private Sector Advisory Council 
CONFAZ, Conselho Nacional de Política 
Fazendária National Fiscal Policy Council 
CONMETRO, Conselho Naci onal de Metrologia, 
Normalização e Qualidade Industrial  National Council of Metrology, Standardization 
and Industrial Quality 
COPOM (BCB), Conselho de Política Monetária Monetary Policy Committee 
COV, Contratos de Opções Variáveis Public Option Contracts 
CPR, Cédula de Produto Rural Rural Product Certificate 
CRCs, Conselhos Regionais de Contabilidade Regional Accounting Councils  
CTNBio, Comissão Nacional Técnica de 
Biossegurança National Technical Commission on 
Biotechnology 
CVM, Comissão de Valores Mobiliários Brazilian Securities Exchange Commission 
CVP, Comité Veterinário Permanente do Cono Sul Standing Veterinary Committee of the South 
Cone 
CZPE, Conselho Nacional das Zonas de 
Processamento de Exportação National Council of Export Processing Zones 
DECEA, Departamento de Controle do Espaço Aéreo Department of Air Space Control 
DECEX (SECEX), Departamento de Comercio 
Exterior  Foreign Trade Operations 
DECIC (BCB), Departamento de Prevenção a 
Ilícitos Financeiros e de Atendimento de 
Demandas de Informações do Sistema Financeiro Department of Financial Compliance and 
Financial Information Treatment of the Central 
Bank 
DECOM (SECEX), Departamento de Defesa 
Comercial Department of Trade Remedies  
DECOS, Departamento de Políticas de Comercio Department of Commerce and Services Policies WT/TPR/S/283 • Brazil 
 
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  e Serviços 
DEINT (SECEX), Departamento de Negociações 
Internacionais International Trade Negotiations 
DENOC (SECEX), Departamento de Normas e 
Competitividade no Comércio Exterior Rules and Competitiveness in Foreign Trade 
DEORF (Banco Central), Departamento de 
Organização do Sistema Financeiro  Central Bank's Financial Organization 
Department 
DEPLA (SECEX), Departamento de 
Planejamento e Desenvolvimento do Comércio 
Exterior Planning and Development of Foreign Trade 
Policies 
DEST, Departamento de Coordenação e 
Governança das Empresas Estatais Ministry of Planning's Department of 
Coordination and Control of State Enterprises 
DFPC, Diretoria de Fiscalização de Produtos 
Controlados Directorate for the Supervision of Controlled 
Products 
DIRE, Declaração de Importação de Remessas 
Expressas Express Shipment Declaration 
DNPM, Departamento Nacional de Produção 
Mineira National Department of Mineral Production 
DPF, Departamento de Polícia Federal Federal Police Department 
EBC, Empresa Brasil de Comunicação Brazilian Communications Company 
EBSERH, Empresa Brasileira de Serviços 
Hospitalares Brazilian Enterprise of Hospital Services 
EGF, Empréstimo do Governo Federal Federal Government Loan 
ELETROBRAS Centrais Eléctricas Brasileiras ELETROBRAS Brazilian Electrical Power Stations 
ELETRONUCLEAR, ELETROBRAS Termonuclear ELETROBRAS Thermo-Nuclear 
E&P, Exploração e Produção Brazil's Regulatory Framework for Oil and Gas 
Exploration and Production 
EPE, Empresa de Pesquisa Energética Energy Research Company 
EPL, Empresa de Planejamento e Logística S.A.  Research and Logistics Company to Promote 
High-Speed Railways Services 
FAT, Fundo de Amparo ao Trabalhador Workers’ Assistance Fund 
FCO, Fundo Constitucional de Financiamento do 
Centro-Oeste Constitutional Funds for Financing the Mid-West 
Regions 
FDA, Fundo de Desenvolvimento da Amazônia Amazon Development Fund 
FDNE, Fundo de Desenvolvimento do Nordeste North-East Region Development Fund 
FENASEG, Federação Nacional das Empresas de 
Seguros Privados e de Capitalização National Federation of Insurance Services 
Providers 
FFEX, Fundo Financeiro de Exportação Export Financing Fund 
FGC, Fundo Garantidor de Créditos Credit Guarantee Fund 
FGE, Fundo Garantidor de Exportação Export Guarantee Fund 
FINAM, Fundo de Investimento da Amazônia Amazon Investment Fund 
FINAME (BNDES), Agência Especial de 
Financiamento Industrial Special Industrial Financing Agency  
FINEP, Financiadora de Estudos e Projetos Financing of Studies and Projects 
FINOR, Fundo de Investimentos do Nordeste North-East Investment Fund 
FIRJAN, Federação das Indústrias do Estado do 
Rio de Janeiro  Federation of Industries of the State of Rio de 
Janeiro 
FMM, Fundo da Marinha Mercante Merchant Marine Fund 
FNAC, Fundo Nacional de Aviação Civil National Civil Aviation Fund 
FNDCT, Fundo Nacional de Desenvolvimento 
Científico e Tecnológico Scientific and Technological Development Fund 
FNE, Fundo Constitucional de Financiamento do 
Nordeste Constitutional Fund for Financing the North-East 
Region 
FNO, Fundo Constitucional de Financiamento do 
Norte Constitutional Funds for Financing the North 
Region 
FUNCAFE, Fundo de Defesa da Economia 
Cafeeira Brazilian Coffee Fund 
FUNRES, Fundo de Recuperação Econômica do 
Estado do Espírito Santo Fund for the Economic Recovery of the State of 
Espírito Santo 
FUNTTEL, Fundo para o Desenvolvimento 
Tecnológico das Telecomunicações Telecommunications Technology Development 
Fund 
FUST, Fundo de Universalização dos Serviços de Universal Telecommunications Service Fund WT/TPR/S/283 • Brazil 
 
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  Telecomunicações 
Garantia-Safra Harvest Guarantee Programme 
GERES, Grupo de Recuperação Econômica do 
Estado do Espírito Santo  
IBAMA, Instituto Brasileiro do Meio Ambiente e 
dos Recursos Naturais Renováveis Brazilian Institute of the Environment and 
Renewable Natural Resources 
IBGE, Instituto Brasileiro de Geografia e 
Estatística National Statistical Bureau 
IBRAC, Instituto Brasileiro de Estudos de 
Concorrência, Consumo e Comércio Brazilian Institute of International Trade, 
Consumer and Competition Studies 
ICMS, Imposto sobre Circulação de Mercadorias 
e Prestação de Serviços Tax on the Circulation of Goods and Services 
INB, Indústrias Nucleares do Brasil Brazilian Nuclear Industries 
INMETRO, Instituto Nacional de Metrologia, 
Normalização e Qualidade Industrial National Institute of Metrology, Quality and 
Technology 
INOVA Brasil Programme, Programa de 
Incentivo à Inovação nas Empresas Brasileiras INOVA Brazil Programme 
INOVA PETRO INOVA Petroleum Programme 
INOVAR-AUTO, Programa de Incentivo à 
Inovação Tecnológica e Adensamento da Cadeia 
Produtiva de Veículos Automotores Programme of Incentives Technological 
Innovation and Production Strengthening in the 
Automotive Industry 
INPC, Índice Nacional de Preços ao Consumidor National Consumer Price Index 
INPI, Instituto Nacional de Propriedade 
Industrial National Industrial Property Institute 
IOF, Imposto sobre Operações Financeiras Financial Transaction Tax 
IPCA, Índice Nacional de Preços ao Consumidor 
Amplo Broad Consumer Price Index 
IPEA, Instituto de Pesquisa Econômica Aplicada Brazilian Institute of Applied Economic Research 
IPI, Imposto sobre Produtos Industrializados Tax on Industrial Products 
IPTU, Imposto Sobre a Propriedade Predial e 
Territorial Urbana Tax on Urban Real States Property 
IRB, Instituto de Resseguros do Brasil Brazilian Reinsurance Institute 
ISS, Imposto sobre os Serviços Tax on Services 
LEC, Linha Especial de Crédito à 
Comercialização Special Marketing Credit Line 
LOAS, Lei Orgânica da Assistência Social Organic Social Assistance Law 
MAPA, Ministério da Agricultura, Pecuária e 
Abastecimento Ministry of Agriculture, Livestock and Food 
Supply 
MCT, Ministério da Ciência e Tecnologia Ministry of Science and Technology 
MCTI, Ministério da Ciência, Tecnologia e Inovação Ministry of Science, Technology and Innovation 
MDA, Ministério do Desenvolvimento Agrário Ministry of Agrarian Development 
MDIC, Ministério do Desenvolvimento, Indústria 
e Comércio Exterior Ministry of Development, Industry and Foreign 
Trade 
MODERAGRO, Programa de Modernização da 
Agricultura e Conservação de Recursos Naturais Programme for the Modernization of Agriculture 
and the Conservation of Natural Resources 
MODERFROTA, Programa de Modernização da 
Frota de Tratores Agrícolas e Implementos Associados e Colheitadeiras Tractor Fleet Modernization Incentives 
Programme 
MODERINFRA, Programa de Incentivo à 
Irrigação e à Armazenagem Incentives Programme for Irrigation and 
Storage 
MPA, Ministério da Pesca e Aquicultura Ministry of Fisheries and Aquaculture 
NTN, Notas do Tesouro Nacional National Treasury Notes 
ONS, Organismos de Normalização Setorial  Accredited Sectoral Standardization Bodies 
PAA, Programa de Aquisição de Alimentos Food Purchase Programme 
PAC, Programa de Acel eração do Crescimento Growth Acceleration Programme 
PADIS, Programas de Incentivos ao Setor de 
Semicondutores  Programme of Support to the Technological 
Development of the Semiconductors Industry 
PAISS, Plano BNDES-FINEP de Apoio à Inovação 
dos Setores Sucroenergético e Sucroquímico BNDES-FINEP Innovation Support Plan for the 
Sugar-based energy and chemical sectors 
PASEP, Programa de Formação do Patrimônio 
do Servidor Público Contribution to Finance Unemployment 
Insurance and Allowances for Low-Paid WT/TPR/S/283 • Brazil 
 
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  Workers. 
PASS (BNDES), Programa de Apoio ao Setor 
Sucrual  Programme of Support to the Sugar and Ethanol 
Sector 
PDP, Política de Desenvolvimento Produtivo Productive Development Policy 
PDTA, Programas de Desenvolvimento Tecnológico Agropecuário Agriculture/Cattle Breeding Technology 
Development Programme 
PDTI, Programa de Desenvolvimento 
Tecnológico e Industrial Industrial Technology Development Programme 
PEP, Premio para Escoamento de Produto Premium for Product Outflow 
PEPRO, Premio Equalizador Pago ao Produtor Agricultural Products' Sale Option Private 
Premium  
PETROBRAS Brazilian Petroleum Company 
PEXPAM, Programa Especial de Exportação da 
Amazônia Ocidental Western Amazon Export Special Programme 
PGMU, Plano Geral de Metas para a 
Universalização Universal Service Plan 
PGO, Plano Geral de Outorgas General Port Concession Plan 
PGPAF, Programa de Garantia de Preços para a 
Agricultura Familiar Price Guarantee Programme for Family Farming 
PGPM, Política de Garantia de Preços Mínimos Policy of Guaranteed Minimum 
PIS, Programa de Integração Social Contribution to the Social Integration 
Programme 
Plano Brasil Maior Greater Brazil Plan 
PNAD, Pesquisa Nacional por Amostra de Domicílios National Household Sample Survey 
PNAE, Programa Nacional de Alimentação 
Escolar National School Feeding Programme 
PNBL, Plano Nacional de Banda Larga National Broadband Plan 
PND, Programa Nacional de Desestatização  Brazilian Privatization Programme 
PNDR, Política Nacional de Desenvolvimento 
Regional National Policy of Regional Development 
PNLP, Plano Nacional de Logística Portuária National Logistics and Ports Plan 
PPB, Processo Produtivo Básico Basic Productive Process 
PPSA, Pré-Sal Petróleo S.A. Pre-salt Petroleum Company 
PREVIC, Superintendência Nacional de 
Previdência Complementar National Complementary Welfare 
Superintendence 
PROCAP-Agro, Programa de Capitalização de 
Cooperativas Agropecuárias Agricultural Cooperatives Capitalization 
Programme 
PRODECOOP, Programa de Desenvolvimento 
Cooperativo para Agregação de Valor à 
Produção Agropecuária Cooperative Development Programme for the 
Enhancement of Agricultural Value Added 
PROEX, Programa de Financiamento às 
Exportações Export Financing Programme 
PROFARMA Support Programme for the Development of the 
Pharmaceutical Productive Chain 
PROFROTA, Programa de Financiamento da 
Ampliação e Modernização da Frota Pesqueira 
Nacional Programme for Financing the Enlargement and 
Modernization of National Fishing Fleet 
PROGER Rural, Programa de Geração de 
Emprego e Renda da Área Rural Rural Employment and Revenue Generation 
Programme 
PROINFA, Programa de Incentivo às Fontes 
Alternativas de Energia Elétrica Alternative Sources of Electric Energy 
Programme 
PRONAF, Programa Nacional de Fortalecimento da Agricultura Familiar Programme to Strengthen Household 
Agriculture 
PRONAMP, Programa Nacional de Apoio ao 
Médio Produtor Rural Medium-Scale Agricultural Producer Support 
Programme 
PROP, Premio de Risco para Aquisição de 
Produto Agrícola Oriundo de Contrato Privado de Opção de Venda Private Option Risk Premium 
PRORENOVA (BNDES), Programa de Apoio à 
Renovação e Implantação de Novos Canaviais Programme of Support to the Renewal and 
Expansion of Sugarcane Fields 
Programa de Subvenção Econômica à Inovação Economic Subvention to National Innovation WT/TPR/S/283 • Brazil 
 
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  Nacional Programme 
PSI-BK BNDES Programme for the Sustainability of 
Investment in Capital Goods 
PSR, Prêmio do Seguro Rural Rural Insurance Premiums 
REB, Registro Especial Brasileiro Brazilian Special Register 
RECAP, Regime Especial para Aquisição de Bens 
de Capital para Empresas Exportadoras Special Regime for the Purchase of Capital 
Goods for Exporting Enterprises 
RECOF, Regime Aduaneiro de Entreposto 
Industrial sob Controle Informatizado Special System of Industrial Depots Subject to 
Standardized Control 
RDE-IED, Registro Declaratório Eletrônico - 
Investimento Externo Direto Electronic Statement of Registration - Foreign 
Direct Investment Module  
REI, Registro de Exportadores e Importadores Registry of Exporters and Importers 
REICOMP, Regime Especial de Incentivo a 
Computadores para Uso Educacional Special Incentives Regi me for Computers for 
Educational Use 
Reintegra Special Regime for the Reimbursement of Taxes 
for Exporters  
REMESSA Computerized Control of Expedited Shipments 
REPENEC, Regime Especial de Incentivos para o 
Desenvolvimento de Infraestrutura da Indústria 
Petrolífera nas Regiões Norte, Nordeste e 
Centro-Oeste Special Incentive Regime for the Development 
of the Petroleum Industry's Infrastructure in the 
North, North-East and Central Western regions 
REPES, Regime Especial de Tributação para a 
Plataforma de Exportação de Serviços de 
Tecnologia Special Regime for the Information Technology 
Exportation Platform 
Revitaliza Programme for the Revitalization of Companies 
REPETRO, Regime Aduaneiro Especial de 
Exportação e de Importação de Bens 
Destinados às Atividades de Pesquisa e de Lavra das Jazidas de Petróleo e de Gás Natural  Special Regime for the Exportation and 
Importation of Goods Destined to the 
Exploration of Petroleum and Natural Gas 
REPNBL-Redes, Regime Especial de Tributação 
do Programa Nacional de Banda Larga para 
Implantação de Redes de Telecomunicações Special Taxation Regime for the National 
Broadband Programme for the Deployment of 
Telecommunications Networks 
RETAERO, Regime Especial para a Indústria 
Aeronáutica Brasileira Special Regime for the Aeronautical Industry  
RFB, Secretaria da Receita Federal do Brasil Secretariat of Federal Revenue of Brazil 
RMCCI, Regulamento do Mercado de Câmbio e 
Capitais Internacionais Regulation of Foreign Exchange Market and 
International Capital 
RMV, Renda Mensal Vitalícia Lifetime Monthly Income  
RNC (MAPA), Registro Nacional de Cultivares National Register of Plant Varieties 
RTS, Regime de Tributação Simplificada Simplified Tax Regime  
SAC/PR, Secretaria de Aviação Civil Civil Aviation Secretariat 
SBCE, Seguradora Brasileira de Crédito à 
Exportação Brazilian Export Credit Insurance Company S.A. 
SCE, Seguro de Credito a Exportação Export Credit Insurance 
SDA (MAPA), Secretaria De Defensa 
Agropecuária Secretariat of Agricultural Protection  
SEAE, Secretaria de Acompanhamento 
Econômico  Secretariat of Economic Monitoring 
SEAF, Seguro da Agricultura Familiar Family Farming Insurance Programme 
SECEX, Secretaria de Comércio Exterior  Secretariat of Foreign Trade  
SELIC, Sistema Especial de Liquidação e 
Custódia Overnight Inter-bank Loans Interest Rate  
SFN, Sistema Financeiro Nacional Brazilian Financial System 
SIASG, Sistema Integrado de Administração de 
Serviços de Administração de Serviços Gerais  Integrated System for the Administration of 
General Services 
SIGVIG, Sistema de Informações Gerenciais do 
Trânsito Internacional de Produtos e Insumos Computerized System for the Management of 
Agricultural Products and Inputs transiting 
through Brazil 
SIN, Sistema Interligado Nacional National Integrated Grid 
SINMETRO, Sistema Nacional de Metrologia, Normalização e Qualidade Industrial National System of Metrology, Standardization 
and Industrial Quality 
SINPI, Sistema Integrado de Propriedade Integrated Industrial Property System WT/TPR/S/283 • Brazil 
 
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  Industrial 
SISBACEN, Sistema de Informação do Banco 
Central Central Bank's Information System 
SISBIOLIST, Software para Depósito de 
Sequências Biológicas  Software for the Filing of Biological Sequences 
SISCOMEX, Sistema Integrado de Comércio 
Exterior Integrated Foreign Trade System 
SISCOSERV, Sistema Integrado de Comércio 
Exterior de Serviços, Intangíveis e Outras 
Operações que Produzam Variações no 
Patrimônio  Integrated System of Trade in Foreign Services, 
Intangible Assets, and Other Operations 
SNCR, Sistema Nacional de Crédito Rural National System of Rural Credit 
SNSP, Sistema Nacional de Seguros Privados Brazilian national insurance system 
SRI (MAPA), Secretaria de Relações 
Internacionais do Agronegócio Secretariat for International Relations of 
Agribusiness 
STF, Supremo Tribunal Federal  Federal Supreme Court  
SUDAM, Superintendência do Desenvolvimento da Amazônia Amazon Development Authority  
SUDENE, Superintendência do Desenvolvimento 
do Nordeste  North-East Region Development Authority  
SUFRAMA, Superintendência da Zona Franca de 
Manaus  Superintendence of the Manaus Free Trade 
Zone 
SUSEP, Superintendência de Seguros Privados Superintendence of Private Insurance  
TCU, Tribunal de Contas da Uniâo  Federal Accounts Tribunal 
TIPI, Tabela de Incidência do Imposto sobre 
Produtos Industrializados Industrialized Products Tax Table 
TJLP, Taixá de Juros a Longo Prago  Long Term Interest Rate  
VE, Vitrina do Exportador Exporters Showcase 
VEP, Valor de Escoamento de Produto Outflow of Product Value 
ZFM, Zona Franca de Manaus Manaus Free Trade Zone 
 WT/TPR/S/283 • Brazil 
 
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  5  APPENDIX TABLES 
Table A1.1 Merchandise exports by groups of products, 2007-12 
(US$ million and %) 
Description 2007  2008  2009  2010 2011 2012  
Total 160,649  197,942  152,995  197,356 256,039 242,580  
 (% of total exports) 
Total primary products 50.1 53.3 59.0 63.2 64.2 62.7  
   Agriculture 30.1 31.0 37.7 34.8 33.8 35.6 
      Food 26.2  27.4 33.9 30.8 30.2 31.8  
         2222 Soya beans 4.2 5.5 7.5 5.6 6.4 7.1 
         0611 Sugars, beet/cane, raw, solid, no added 
flavour/colour 1.9 1.8 3.9 4.7 4.5 4.1  
         0123 Poultry, meat and offal 2.7 3.0 3.2 3.0 2.8 2.9 
         0813 Oil-cake, oilseed residues 1.8  2.2 3.0 2.4 2.2 2.7  
         0711 Coffee, not roasted  2.1 2.1 2.5 2.6 3.1 2.4 
         0449 Other maize, unmilled 1.2  0.7 0.8 1.1 1.0 2.2  
         0112 Bovine meat, frozen 1.7 1.9 1.7 1.7 1.4 1.5 
      Agricultural raw material 3.8  3.6 3.8 4.0 3.5 3.8  
         2515 Chemical wood pulp, soda/sulphate bleached  1.8 1.9 2.0 2.2 1.8 1.8 
         2631 Cotton (other than linters), not carded or 
combed 0.3 0.4 0.4 0.4 0.6 0.9  
   Mining 20.0 22.2 21.3 28.5 30.4 27.0 
      Ores and other minerals 8.9  10.7 10.8 17.1 18.7 15.1  
         2815 Iron ores and concentrates, not agglomerated  4.4 5.6 6.9 10.8 12.4 9.8 
         2816 Iron ore ag glomerates (sinters, pellets, 
briquettes, etc.) 2.1 2.8 1.7 3.8 3.9 3.0  
      Non-ferrous metals 2.9 2.1 1.6 1.4 1.2 1.0 
         6841 Aluminium and aluminium alloys, unwrought  1.4 1.0 0.8 0.6 0.5 0.4  
      Fuels 8.3 9.4 8.9 10.1 10.5 10.9 
         3330 Crude oils of petroleum and bituminous 
minerals 5.5 6.9 6.1 8.3 8.4 8.4  
         334 Petroleum oils (other than crude petroleum)  2.7 2.4 2.0 1.6 1.7 2.2 
Manufactures 46.6 43.7 38.0 35.7 32.8 33.8  
   Iron and steel 6.3 6.9 4.9 4.5 4.9 4.6 
         6726 Semi-finished iron/steel products <0.25% 
carbon 1.0 1.6 0.9 1.1 1.4 1.2  
         6715 Other ferro-alloys (excl. radio-active ferro-
alloys) 0.9 1.1 0.9 1.0 1.0 1.1 
   Chemicals 6.6  6.4 6.9 6.2 5.9 6.2  
         5121 Acyclic monohydric alcohols 1.0 1.2 0.9 0.6 0.6 0.9 
         5711 Polyethylene 0.7  0.5 0.6 0.5 0.5 0.5  
   Other semi-manufactures 6.9 5.9 5.8 5.4 4.7 5.0 
         6114 Other bovine/equine leather, without hair 
(excl. of 611.8) 1.3 0.9 0.7 0.9 0.8 0.8  
6412 Paper and paperboard, uncoated of a kind 
used for writing 0.4 0.4 0.5 0.5 0.4 0.4 
   Machinery and transport equipment 22.6  21.1 17.2 16.8 15.2 15.8  
      Power generating machines  1.0 1.0 1.1 0.9 0.8 0.9 
         7163 Motors (other than motors of an output not 
exceeding 37.5 W) and generators, alternating 
current; generating sets; electric rotary converters 0.4 0.4 0.4 0.3 0.3 0.3  
      Other non-electrical machinery 5.1 4.8 3.9 3.8 3.9 4.3 
         7231 Bulldozers, angledozers, etc., self-propelled  0.6 0.6 0.3 0.4 0.6 0.6  
         7431 Air/vacuum pumps/compressors, etc. with fan  0.5 0.4 0.4 0.4 0.3 0.4 
         Agricultural machinery and tractors 0.8  0.8 0.6 0.6 0.5 0.5  
      Office machines & telecommunication equipment  1.7 1.6 1.5 1.0 0.7 0.6 
         7643 Radio or television transmission apparatus  1.3 1.1 0.9 0.5 0.2 0.1  
      Other electrical machines  1.4 1.2 1.3 1.1 0.9 0.8 
      Automotive products 8.2  7.5 5.6 6.4 5.6 5.4  
         7843 Other motor vehicle parts and accessories 
of 722, 781 to 783 1.7 1.8 1.6 1.7 1.6 1.6 
         7812 Motor vehicles for the transport of persons, 
n.e.s. 2.9 2.5 2.1 2.2 1.7 1.5  
         7821 Goods vehicles 1.3 1.1 0.6 0.9 0.9 0.9 
      Other transport equipment  5.2 5.0 3.8 3.5 3.2 3.8  
7924 Aeroplanes, etc. (excluding helicopters), 
>15,000 kg unladen 2.3 2.2 2.0 1.5 1.3 1.5 
7139 Parts, n.e.s., for piston engines of 713.2, 
713.3, 713.8 1.0 0.8 0.6 0.7 0.8 0.7  
   Textiles 0.9 0.7 0.6 0.6 0.4 0.4 
   Clothing 0.2  0.1 0.1 0.1 0.1 0.1  
   Other consumer goods 3.1 2.6 2.5 2.1 1.7 1.8 
8514 Other footwear, leather or composition 
leather uppers 0.9 0.7 0.6 0.5 0.3 0.2  
Other 3.3 3.1 3.0 1.1 3.0 3.6 
   Gold 0.5  0.5 0.9 0.9 0.9 1.1  
Source: UNSD, Comtrade database (SITC Rev.3). WT/TPR/S/283 • Brazil 
 
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Table A1.2 Merchandise imports by groups of products, 2007-12 
(US$ million and %) 
Description 2007  2008  2009  2010 2011 2012  
Total 120,621  173,197  127,647  180,459 226,243 223,149  
 (% of total imports) 
Total primary products 29.4 29.7 24.0 26.0 28.0 26.8  
   Agriculture 6.0 5.6 6.4 6.0 6.0 5.9 
      Food 4.6  4.4 5.3 4.6 4.5 4.8  
0412 Other wheat (including spelt) and meslin, 
unmilled 1.2 1.1 0.9 0.8 0.8 0.8 
0482 Malt, whether or not roasted (including malt 
flour) 0.2 0.3 0.4 0.2 0.2 0.2  
         0579 Fruit, fresh, dried, n.e.s. 0.2 0.1 0.2 0.2 0.2 0.2 
      Agricultural raw material 1.4  1.2 1.2 1.3 1.5 1.1  
         2321 Synthetic rubbe r 0.4 0.3 0.3 0.3 0.3 0.3 
   Mining 23.3  24.1 17.6 20.0 22.0 20.9  
      Ores and other minerals 1.9 1.9 1.0 1.1 1.2 0.9 
         2831 Copper ores and concentrates 0.9  0.6 0.5 0.5 0.5 0.3  
      Non-ferrous metals 2.9 2.4 1.8 2.3 2.3 2.0 
         6821 Copper anodes; alloys; unwrought 1.4  1.1 0.8 1.1 0.9 0.9  
      Fuels 18.5 19.8 14.8 16.6 18.5 18.0 
         334 Petroleum oils (other than crude petroleum)  5.0 5.6 3.6 6.2 7.5 7.3  
         3330 Crude oils of petroleum and bituminous 
minerals 9.9 9.6 7.2 5.6 6.2 6.0 
         3432 Natural gas, in the gaseous state 1.2  1.6 1.2 1.2 1.2 1.5  
         3212 Other coal, whether or pulverized, not 
agglomerated 1.2 1.5 1.6 1.5 1.8 1.3 
Manufactures 63.9 70.3 75.9 74.0 72.0 73.1  
   Iron and steel 2.0 2.5 2.5 3.3 2.2 2.2 
   Chemicals 19.0  19.6 19.8 17.9 18.5 18.9  
5623 Mineral/chemical fe rtilizers (excluding crude 
natural potassium salts) 1.3 2.2 1.7 1.3 1.6 1.6 
5416 Glycosides; glands, etc. and extracts; 
antisera/vaccines, etc. 0.9 0.8 1.3 1.5 1.2 1.3  
5429 Medicaments, n.e.s. 1.5 1.2 1.6 1.4 1.2 1.2 
   Other semi-manufactures 4.9  4.6 4.8 5.0 5.0 5.1  
   Machinery and transport equipment 30.3 35.9 39.9 39.3 38.3 38.4 
      Power generating machines  2.2 2.0 2.9 2.2 2.1 2.3  
7149 Parts of engines and motors of 714.41 and 
714.8 0.6 0.6 0.8 0.5 0.5 0.6 
      Other non-electrical machinery 9.4  9.6 10.5 10.5 10.2 10.2  
7284 Machinery and appliances for particular 
industries, n.e.s. 0.9 0.9 0.8 0.7 0.9 0.8 
         Agricultural machinery and tractors 0.2  0.2 0.2 0.2 0.3 0.4  
      Office machines & telecommunication equipment  4.7 9.4 9.7 9.7 9.0 9.0 
         7649 Parts and accessories for apparatus of 
division 76 0.9 2.4 2.1 2.6 2.5 2.5  
         7764 Electronic integrated circuits and 
microassemblies 0.0 2.0 2.3 2.2 1.9 1.9 
      Other electrical machines  3.8 3.8 4.3 4.2 4.0 4.1  
         7725 Switches, relays, fuses etc. for a voltage not 
exceeding 1,000 V 0.6 0.6 0.6 0.6 0.6 0.6 
      Automotive products 6.9  7.6 9.2 9.4 10.1 9.7  
7812 Motor vehicles for the transport of persons, 
n.e.s. 2.6 3.1 4.3 4.6 5.3 4.3 
7843 Other motor vehicle parts and accessories 
of 722, 781 to 783 2.7 2.9 2.9 2.7 2.8 3.0  
         7821 Goods vehicles 0.7 0.7 1.1 1.1 1.1 1.3 
      Other transport equipment  3.3 3.5 3.5 3.3 3.1 3.1  
   Textiles 1.8 1.7 2.0 2.1 1.9 1.9 
   Clothing 0.5  0.5 0.8 0.8 0.9 1.1  
   Other consumer goods 5.4 5.4 6.2 5.6 5.1 5.4 
         8746 Automatic regulating and controlling 
instruments 0.5 0.5 0.5 0.4 0.4 0.4  
Other 6.7 0.0 0.1 0.1 0.0 0.1 
Source: UNSD, Comtrade database (SITC Rev.3). WT/TPR/S/283 • Brazil 
 
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  Table A1.3 Merchandise exports by trading partner, 2007-12 
(US$ million and %) 
Description 2007  2008  2009  2010 2011 2012  
Total 160,649 197,942 152,995 197,356 256,039 242,580 
 (% of total exports) 
  America 43.3 40.8 34.7 35.1 33.3 32.6 
    United States 15.8 14.0 10.3 9.7 10.1 11.1 
    MERCOSURa 10.8 11.0 10.3 11.4 10.9 9.4 
      Argentina 9.0 8.9 8.4 9.3 8.9 7.4 
      Paraguay 1.0 1.3 1.1 1.3 1.2 1.1 
      Uruguay 0.8 0.8 0.9 0.8 0.8 0.9 
    Other America 27.5 26.8 24.4 25.3 23.2 21.5 
      Bolivarian Republic of Venezuela 2.9 2.6 2.4 1.9 1.8 2.1 
      Chile 2.7 2.4 1.7 2.1 2.1 1.9 
      Mexico 2.7 2.2 1.7 1.9 1.5 1.7 
      Canada 1.5 0.9 1.1 1.2 1.2 1.3 
      Colombia 1.5 1.2 1.2 1.1 1.0 1.2 
      Peru 1.0 1.2 1.0 1.0 0.9 1.0 
  Europe 26.9 25.3 24.6 23.7 22.5 22.0 
    EU(27) 25.2 23.5 22.3 21.8 20.7 20.2 
      Netherlands 5.5 5.3 5.3 5.2 5.3 6.2 
      Germany 4.5 4.5 4.0 4.1 3.5 3.0 
      Italy 2.8 2.4 2.0 2.1 2.1 1.9 
      United Kingdom 2.1 1.9 2.4 2.3 2.0 1.9 
      France 2.2 2.1 1.9 1.8 1.7 1.7 
    EFTA 1.1 1.2 1.7 1.2 1.1 1.2 
      Switzerland 0.7 0.7 1.3 0.7 0.6 0.7 
    Other Europe 0.6 0.6 0.6 0.7 0.7 0.6 
  Commonwealth of Independent States (CIS) 2.7 2.8 2.2 2.4 2.0 1.8 
      Russian Federation 2.3 2.4 1.9 2.1 1.6 1.3 
      Ukraine 0.2 0.2 0.2 0.1 0.2 0.3 
  Africa 5.3 5.1 5.7 4.7 4.8 5.0 
      Egypt 0.8 0.7 0.9 1.0 1.0 1.1 
      South Africa 1.1 0.9 0.8 0.7 0.7 0.7 
  Middle East 4.0 4.1 4.9 5.3 4.8 4.8 
      Kingdom of Saudi Arabia 0.9 1.3 1.3 1.6 1.4 1.2 
      United Arab Emirates 0.7 0.7 1.2 0.9 0.8 1.0 
  Asia 16.1 19.6 26.1 28.8 30.3 31.3 
    China 6.7 8.3 13.2 15.6 17.3 17.0 
    Japan 2.7 3.1 2.8 3.6 3.7 3.3 
    Six East Asian Traders 4.5 5.5 5.7 5.7 6.0 6.5 
      Korea, Rep. of 1.3 1.6 1.7 1.9 1.8 1.9 
      Singapore 0.9 1.1 0.8 0.7 1.1 1.2 
      Hong Kong, China 0.8 0.9 1.2 0.9 0.8 1.0 
      Chinese Taipei 0.5 0.7 0.6 0.9 0.9 1.0 
      Thailand 0.6 0.8 0.7 0.8 0.7 0.9 
      Malaysia 0.4 0.4 0.5 0.6 0.6 0.6 
    Other Asia 2.2 2.7 4.5 3.9 3.3 4.5 
      India 0.6 0.6 2.2 1.8 1.3 2.3 
      Indonesia 0.4 0.6 0.8 0.8 0.7 0.8 
  Other 1.8 2.3 1.7 0.0 1.9 2.0 
      Bunkers 0.0 2.3 1.7 0.0 1.9 2.0 
a The Bolivarian Republic of Venezuela became full member of MERCOSUR as of July 2012. 
Source: UNSD, Comtrade database (SITC Rev.3). WT/TPR/S/283 • Brazil 
 
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  Table A1.4 Merchandise imports by trading partner, 2007-12 
(US$ million and %) 
Description 2007  2008  2009  2010 2011 2012  
Total 120,621  173,197  127,647  180,459 226,243 223,149  
 (% of total imports) 
  America 34.9 33.5 35.0 34.0 33.5 33.1  
    United States 15.7 14.9 15.8 15.1 15.1 14.6 
    MERCOSURa 9.6 8.6 10.3 9.2 8.6 8.6  
      Argentina 8.6 7.7 8.8 8.0 7.5 7.4 
      Uruguay 0.7  0.6 1.0 0.9 0.8 0.8  
      Paraguay 0.4 0.4 0.5 0.3 0.3 0.4 
    Other America 19.2  18.5 19.2 19.0 18.4 18.4  
      Mexico 1.6 1.8 2.2 2.1 2.3 2.7 
      Chile 2.9  2.4 2.0 2.3 2.0 1.9  
      Plurinational State of Bolivia 1.3 1.7 1.3 1.2 1.3 1.5 
      Canada 1.4  1.9 1.3 1.5 1.6 1.4  
      Peru 0.8 0.6 0.4 0.5 0.6 0.6 
      Colombia 0.4  0.5 0.4 0.6 0.6 0.6  
      Bolivarian Republic of Venezuela 0.3 0.3 0.5 0.5 0.6 0.4 
  Europe 24.6 22.8 25.2 23.6 22.6 23.5  
    EU(27) 22.2 20.9 22.9 21.2 20.5 21.4 
      Germany 7.2  6.9 7.7 6.5 6.7 6.4  
      Italy 2.8 2.7 2.9 2.7 2.8 2.8 
      France 2.9  2.7 2.8 2.6 2.4 2.7  
      Spain 1.5 1.4 1.5 1.5 1.5 1.6 
      United Kingdom 1.6  1.5 1.9 1.7 1.5 1.6  
    EFTA 2.3 1.7 2.0 2.0 1.6 1.6 
      Switzerland 1.8  1.3 1.6 1.6 1.3 1.2  
    Other Europe 0.2 0.2 0.3 0.4 0.4 0.5 
  Commonwealth of Independent States (CIS)  2.3 3.1 1.6 1.7 2.3 1.8  
      Russian Federation 1.4 1.9 1.1 1.1 1.3 1.3 
      Belarus 0.3  0.7 0.4 0.4 0.7 0.4  
  Africa 9.4 9.1 6.6 6.3 6.8 6.4 
      Nigeria 4.4  3.9 3.7 3.3 3.7 3.6  
      Algeria 1.9 1.4 1.1 1.3 1.4 1.4 
  Middle East 2.7 3.6 2.5 2.6 2.7 3.3  
      Kingdom of Saudi Arabia 1.4 1.7 1.3 1.1 1.4 1.4 
      Israel 0.6  0.7 0.5 0.6 0.4 0.5  
  Asia 26.1 28.0 29.0 31.8 31.9 31.5 
    China 10.5  11.6 12.5 14.2 14.5 15.3  
    Japan 3.8 3.9 4.2 3.9 3.5 3.5 
    Six East Asian Traders 8.1  8.4 8.6 9.2 8.9 8.3  
      Korea, Rep. of 2.8 3.1 3.8 4.7 4.5 4.1 
      Chinese Taipei 1.9  2.0 1.9 1.7 1.6 1.4  
      Thailand 0.8 0.8 1.0 1.0 1.1 1.1 
      Malaysia 1.1  0.9 1.0 1.0 1.0 0.9  
      Hong Kong, China 0.5 0.5 0.4 0.4 0.4 0.4 
      Singapore 1.0  1.0 0.5 0.5 0.4 0.4  
    Other Asia 3.8 4.1 3.8 4.6 5.0 4.3 
      India 1.8  2.1 1.7 2.3 2.7 2.3  
      Indonesia 0.7 0.6 0.8 0.8 0.8 0.8 
  Other 0.0 0.0 0.0 0.0 0.2 0.4  
a The Bolivarian Republic of Venezuela became full member of Mercosur as of July 2012. 
Source: UNSD, Comtrade database (SITC Rev.3). WT/TPR/S/283 • Brazil 
 
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  Table A2.1 Status of notification requirements to the WTO, March 2013 
WTO Agreement Description of requirement Periodicity Document symbol of most recent 
notification or number of 
notifications 
Agreement on Implementation of Article VI of the GATT 1994 (Anti-Dumping Agreement)  
Article 16.4 Anti-dumping actions taken Semi-annual G/ADP/N/230/BRA, 27 August 2012 
Article.16.5 Notification of domestic 
procedures and authorities competent to initiate and conduct 
investigations Once, then 
changes G/ADP/N/111, 4 December 2003 
Agreement on Agriculture  
Articles 10 
and 18.2 Export subsidies (outlays and 
quantities) Annual G/AG/N/BRA/ 28, 2 October 2012 
Article 18.2 Domestic support Annual G/AG/N/BRA/27, 1 March 2012 
Article 18.2 Volume of imports under tariff 
quotas (MA:2) Annual G/AG/N/BRA/24, 11 March 2009 
Agreement on Import Licensing Procedures  
Article 1.4 Laws and regulations Ad hoc G/LIC/N/1/BRA/5, 19 April 2010 
G/LIC/N/3/BRA/8, 19 April 2010 
Article 5 List of products subject to 
licensing Ad hoc G/LIC/N/2/BRA/5, 19 April 2010 
G/LIC/N/2/BRA/4, 8 December 2008 
Article 7.3 Questionnaire; rules and 
information concerning procedures for the submission of applications Annual for 
questionnaire; rules and information, Once then changes G/LIC/N/3/BRA/9, 16 September 2011 
G/LIC/N/3/BRA/8/corr.1, 22 April 2010 G/LIC/N/3/BRA/8, 19 April 2010 G/LIC/N/3/BRA/7, 1 December 2008 
General Agreement on Trade in Services  
Article V:7 Regional integration Ad hoc S/C/N/388, 18 December 2006 
No new notification during period 
General Agreement on Tariffs and Trade 1994  
Article XVII:4(a) 
of GATT 1994 and 
Par. 1 of the 
Understanding on the Interpretation of Article XVII Notification of state trading 
enterprises Once, then 
changes Last notification G/STR/N/3/BRA, 
11 December 1997 
Article XXVIII:5 Brazil reserved its right, under the 
provisions of Art XXVIII, to modify 
its Schedule  G/MA/252, 27 September 2012 
Agreement on Subsidies and Countervailing Measures  
Article 25.11 Countervailing duty actions taken Semi-annual 
and when 
measure taken G/SCM/N/242/BRA, 31 August 2012 
Article 25.1 Subsidies programmes Annual G/SCM/N/220/BRA, 10 January 2012 
Agreement on Safeguards  
Article 12.1(a) Initiation of investigation relating 
to serious injury or threat thereof Ad hoc G/SG/N/6/BRA/5/Suppl.1, 
11 August 2012 G/SG/N/6/BRA/5/Corr.1, 5 April 2012 
G/SG/N/6/BRA/5, 2 April 2012 G/SG/N/6/BRA/4, 11 August 2009 
Article 12.1(b) Finding of serious injury or threat 
thereof caused by increased 
imports Ad hoc G/SG/N/10/BRA/3/Suppl.4,  
G/SG/N/14/BRA/2, 27 July 2007 
No new notification during period 
Article 12.1(c) Decision to apply or extend a 
safeguard measure Ad hoc G/SG/N/14/BRA/3, 16 August 2010 
Article 9.1 
footnote 2 Non-application of safeguard 
measure to developing countries Ad hoc G/SG/N/10/BRA/3/Suppl.3, 14 June 2005  
G/SG/N/11/BRA/2/Suppl.3, 14 June 2005 
No new notification during period 
Article 12.5 Mid-term review and consultations Ad hoc G/L/723, G/SG/N/13/BRA/3, 
7 December 2004 
No new notification during period WT/TPR/S/283 • Brazil 
 
- 189 - 
 
  WTO Agreement Description of requirement Periodicity Document symbol of most recent 
notification or number of 
notifications 
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article 7, Annex B Notification of changes in sanitary 
and phytosanitary measures Ad hoc 475 notifications (November 2008-
October 2012, including addenda and 
corrigenda) until WTO documents G/SPS/N/BRA/847, 29 October 2012 
Agreement on Technical Barriers to Trade  
Articles 2.9, 2.10 
5.6 and 5.7  Technical regulations Ad hoc 381 notifications (November 2008-
October 2012, including addenda, revisions and corrigenda) until WTO documents G/TBT//N/BRA/359/Add.4/Corr.1, 23 October 2012 
Article 15.2 Implementation and 
administration of the TBT 
agreement  G/TBT/2/Add.26/Rev.2/Suppl.2, 
6 November 2006 
No new notification during period 
Agreement on Textiles and Clothing  
Article 2.11 Notification of programmes of 
integration 12 months 
before their 
coming into 
effect G/TMB/N/475, 13 May 2004 
No new notification during period 
Source: WTO Central Registry of Notifications. WT/TPR/S/283 • Brazil 
 
- 190 - 
 
  Table A3.1 BNDES selected expo rt finance programmes, 2013 
Programme Sector/products targeted Conditions Rates/charges 
EXIM – Pre-shipment 
(BNDES Circular No. 25/2012 of 20 April 2012) 
 Finances production of goods for 
export by Brazilian companies.  Eligible products listed in Circular No.  74/2012, except NCM 87.03 (motor vehicles for less than 10 persons).  Financing granted for up to 
24 months for industrial machinery and 18 months for all other products. Financing up to 90% of the f.o.b. value 
for MSMEs
a, and 80% for 
large enterprises.  To qualify 
automatically, goods must: be accredited under the 
BNDES FINAME schemeb, or 
meet an index of 
nationalizationc
, or  meet PPB 
criteria.d Interest rates:   
for MSMEs: TJLPe or 
LIBOR. 
for large firms: TJ462 
(TJLP + 1% p.a.), TJFPEf 
or 90% of TJ462 + 10% 
of TJFPE, depending on the product. Plus BDNES remuneration rate of 0.9% for MSMEs, and 1.8% or 2.3% for large firms, depending on the product. 
EXIM Pre-shipment "anchor" 
(BNDES Carta-Circular No. 36/2004 of 13 August 2004) 
 Trading companies and other firms 
that make indirect exports produced 
by MSMEs viable. List of eligible 
products the same as for the regular 
pre-shipment programme (Circular 
No. 74/2012). Financing period same as for 
regular pre-shipment 
programme.  Covers up to 
90% of export value.  To 
qualify automatically, goods 
must have an index of 
nationalization of 60% (in 
value and weight terms), or 
meet PPB criteria. Interest rates: TJLP or 
LIBOR, plus a BNDES 
remuneration rate of 
0.9% p.a. 
EXIM Pre-shipment "automobiles" (BNDES Carta-Circular No. 35/2006 of 25 August 2006) 
 Finances production for export of 
passenger automobiles (NCM 87.03). Applicable only to investments in new manufacturing plants with up-to-date technology or in the production of new automobile models. Requires an export 
engagement of 20% of total production within 12 months. Financing for up to 30% of the export engagement value.  Can be for up to 36 months.  To qualify automatically, goods must have an index of 
nationalization of over 60% 
in value. Interest rates: 90% of 
TJ462 + 10% of TJFPE. Plus BNDES remuneration rate of 1.3% p.a. 
EXIM Post-shipment 
(BNDES Circular No. 176/2002 of 12 September 2002 and annexes)  
 Finances commercialization of Brazilian 
goods and services abroad.  Can be 
granted to the importer via the 
exporter (supplier's credit modality) or 
directly to the importer (buyer's credit 
modality). List of eligible goods the 
same as for regular pre-shipment 
programme (Circular No. 74/2012). 
Services associated with the export of 
eligible goods may be financed (up to 
30% of the export value) as well as 
construction and engineering services.  Supplier's credit: financing 
for up to 12 years, and 100% 
of the export value.  To 
qualify automatically, goods 
must have an index of 
nationalization of 60% in 
value terms.  For 
construction and engineering 
services, percentage of 
Brazilian-origin goods in total 
value of financed exports to 
be established by BNDES on 
a case-by-case basis. 
Company must have its 
administration and 
headquarters in Brazil. 
Buyer's credit:  financing 
period and other conditions 
vary according to the 
operation.  Supplier's credit:  cost of 
refinancing is LIBOR plus 
a BNDES remuneration 
rate of at least 1% p.a. 
and a risk premium.  A 
management fee of up 
to 1% and a 
commitment fee of 0.5% 
are levied. 
Buyer's credit: financing 
rates and fees defined 
according to the nature 
of the operation. 
EXIM Automatic 
(BNDES website)   
 Finances commercialization of Brazilian 
exports of goods abroad, at the post-shipment phase. As in the regular EXIM Post-shipment programme, supplier's credit and buyer's credit modalities are available. Focuses on priority markets in Latin America and Financing for up to 5 years, 
depending on the importing country's political and commercial risk. Payment of principal and interest on a bi-annual basis. Interest rate:  LIBOR 
plus a BNDES remuneration rate of 0.4% to 1.2% p.a.  Plus BNDES administrative fee of 0.3%. WT/TPR/S/283 • Brazil 
 
- 191 - 
 
  Programme Sector/products targeted Conditions Rates/charges 
Africa. Capital and consumer goods are 
eligible.   
EXIM/Pro-Aviation exports 
(BNDES website) 
 Finances production of goods and 
services for export by MSMEs 
integrating the Brazilian aviation 
industry production chain. Applies to 
the pre-shipment phase. Financing may be granted up 
to 36 months, and up to 90% 
of the export value.  A 
company must have been 
operating for over three 
years and have exported, 
directly or indirectly, more 
than US$200,000 in goods 
and/or services of the 
aviation industry. In addition, 
the programme is subject to 
the conditions of the Exim 
Pre-shipment programme. Interest rates:   
TJLP + currency 
exchange variation.  Plus 
BNDES remuneration 
rate of 1%.  
PSI – Export Pre-shipment (BNDES Circular No. 20/2012 of 10 April 2012, Circular No. 37/2012 of 25 May 2012; Circular No. 73 of 21 December 2012, and their annexes) 
 Finances production of capital goods 
for export. Eligible products are capital goods listed in Group I of Circular No. 74/2012, except telephone appliances (NCM 8517.1) and their parts (NCM 8517.70). Financing for up to 100% of 
the export value for MSMEs and up to 80% for large firms. Can be granted up to 3 years. To qualify automatically, goods for 
financing, goods must be 
accredited under the BNDES FINAME scheme
b, or meet 
the PPB criteria. Companies must have their headquarters and administration in Brazil.  Fixed interest rate of 5% 
p.a. 
Revitalize 
Exports 
(BNDES 
Circular 
No. 47/2012 
of 10 July 
2012 and 
annexes. Sectors negatively affected by the 
international economic environment.  
Eligible products are listed in Groups I 
and II of Circular No. 74/2012. Export 
companies of all sizes are eligible, 
provided they operate in the sectors 
listed in Annex A (paragraph 4) to 
Circular No. 47/2012. List covers 
several sectors, including production of 
footwear, textiles, leather, toys, fruits, 
automobile parts and information 
technology products.  Requires an export 
engagement. Financing for up 
to 100% of the export 
engagement value, and may 
be granted for up to 2 years.  
To qualify automatically 
goods must be accredited 
under the BNDES FINAME 
schemeb, or meet PPB 
criteria.  Companies must 
have their headquarters and 
administration in Brazil. Fixed interest rate of 8% 
p.a. 
a The BNDES classifies micro, small, and medium-sized enterprises (MSMES) as those with annual 
operational gross revenues less than or equal to R$90 million.  
b In order to be accredited under FINAME, among other criteria, goods must  meet a nationalization 
index of at least 60% in value and weight.  See also section 3.4.2.6. 
c Index of nationalization: measure used by th e BNDES to determine the domestic content of a 
product. The index can be expressed in valu e or weight te rms. For more details, see 
http://www.bndes.gov.br/SiteBNDES/export/sites/d efault/bndes_pt/Galerias/Arquivos/produtos/dow
nload/indice_equipamentos.pdf. 
d PPB stands for Basic Productive Pr ocess; it refe rs to a set of criteria that a product must meet in 
order to benefit from special tax incentives. Criteria may include a minimum number of stages of production that must be undertaken in Brazil.  See also section 3.4.2.1.  
e The long-term interest rate (TJL P) is fixed by the Brazilian Mone tary Council based on inflation 
targets and a risk premium. It is disclosed on a quarterly basis by the Brazilian Central Bank.  The 
TJLP rate for 1 January to 31 March 2013 was 5% p.a.  
f The pre-shipment fixed interest rate (TJFPE) is set quarterly by the BNDES to be applied to export 
dollar–denominated credit so as to reflect the BNDES external f unding costs.  The TJFPE rate 
between 16 July and 14 October 2012 was 3.9% p.a.   
Source: WTO Secretariat, based on  BNDES online information. View ed at: http://www.bndes.gov.br/ 
SiteBNDES/bndes/bndes_ pt/Institucional/Apoio_Financeiro/Programas_e_Fundos/index.html 
[February 2013]. 
  WT/TPR/S/283 • Brazil  
 
- 192 - Table A4. 1 Brazil's Air Transport Agreements, 2012 
Partner (signature) Entry into 
force 
 
 Traffic rights 
(freedoms) Cooperationa/ 
Multiple 
designationb Pricing Capacity 5th 
7th 
cabotage 
Cooperative 
arrangements 
Multiple 
Designation 
Dual approval 
Dual 
disapproval 
Country of 
origin 
Zone pricing 
Free pricing 
Pre-
determination 
Bermuda I 
Free 
determination 
Other 
Albania (initialed on 08.02.2012)  x   x x      x   x  
Angola (signed on 16.12.1993, new ASA initialed on 18.03.2009)  27.12.1991  x   x x   x   x    
Argentina (signed  on 02.06.1948, new ASA initialed on 19.10.2006)   x   x x    x   x    
Aruba (MoU signed on 23.06.2006)  x   x x   x   x    
Australia (signed on 21.04.2010)  x   x x    x   x    
Austria (signed on 16.07.1993) 10.10.1995     x x x     x    
Bahrain (initialed on 01.07.2010)  x   x x      x   x  
Barbados (signed on 26.04.2010 )  x    x x     x    
Belgium (signed on 04.10.2009) 22.09.2011     x x    x   x    
Bolivia (signed on 02.06.1951) 18.06.1954  x    x x     x    
Burkina Faso (initialed on 18.04.2012)     x x      x     
Cameroon (initialed on 19.01.2006)  x    X   x   x    
Canada (signed on 08.08.2011)  x   x X      x   x  
Cape Verde (signed on 29.07.2004) 13.03.2008  x   x X   x   x x   
Chile (signed on 30.07.2009) 11.01.2011  x   x X      x   x  
China (signed on 11.07.1994) 16.02.1998  x   x X   x   x    
Colombia (initialed on 28.05.2009)  x   x X    x   X    
Costa Rica (signed on 04.04.2011)  x   x X     x   x  
Cuba (initialed on 25.02.2011)     x X      x X    
Curaçao (initialed on 01.07.2011)  x   x X     x   x  
Dominican Republic (initialed on 07.08.2009)  x   x X      x   x  
Ecuador (initialed on 19.04.2012)  x   x X     x   x  
Egypt (initialed on 24.06.2005)  x   x X    x   x    
Ethiopia (initialed on 01.07.2010)  x   x X     x x    
France (signed  on 29.10.1965, new ASA initialed on 13.03.2008))  19.02.1967  x   x X    x   x    
Germany (New ASA initialed on 23.11.2007) 15.08.1964  x   x X   x   x    
Ghana (ASA signed on 12.04.05 / New MoU signed on 29.06.2010)   x   x X      x x    
Greece (initialed on 18.03.1997)  x   x  x     x    
Guiana (signed on 10.05.1974, New ASA initialed on 09.09.2005)  04.03.1975  x   x X    x   x    
Hong Kong, China (New MoU signed on 30.06.2010)  16.03.1994  x   x X   x     x  
Hungary (signed on 03.04.1997) 19.04.1999      X  x         
Iceland (ASA initialed on 01.07.2010)  x   x X     x   x  
India (signed on 08.03.2011)  x   x X      x x    
Iraq (signed on 21.01.1977) 24.08.1977       x     x    
Israel (signed on 22.07.2009)  x   x X    x   x    
Italy (Update by exchange of correspondence in November 2010)  04.09.1952  x   x x     x x    
Ivory Coast (initialed on 07.08.1986)       x     x     
  WT/TPR/S/283 • Brazil  
 
- 193 - Partner (signature) Entry into 
force 
 
 Traffic rights 
(freedoms) Cooperationa/ 
Multiple 
designationb Pricing Capacity 5th 
7th 
cabotage 
Cooperative 
arrangements 
Multiple 
Designation 
Dual approval 
Dual 
disapproval 
Country of 
origin 
Zone pricing 
Free pricing 
Pre-
determination 
Bermuda I 
Free 
determination 
Other 
Jamaica (MoU signed on 29.06.2010)  x   x x     x   x  
Japan (New RoD signed on 10.12.1998) 19.10.1962  x   x x  x     x    
Jordan (signed on 05.11.1975) 24.05.1976  x   x  x         
Lebanon (signed on 04.02.1997) 03.03.1998  x    x  x     x    
Kenya (ASA signed on 14.09.2010)  x   x x     x   x  
Korea, Rep. of (signed on 11.08.1992, new ASA initialed on 24.04.2009)  31.05.1995  x   x x      x   x  
Kuwait (signed on 22.07.2010)  x   x x     x   x  
Luxembourg (initialed on 28.08.2008)  x   x x    x   x    
Macao (signed on 15.07.1994) 21.11.1995  x   x x x     x    
Malaysia (signed on 18.12.1995) 06.08.1998  x    x  x     x    
Mexico (signed on  26.05.1995, new ASA initialed on 26.01.2011)  18.07.1996  x   x x   x     x  
Morocco (New ASA initialed on 11.09.2009) 17.05.1978  x   x x    x   x    
Mozambique (ASA signed on 17.06.2010)  x   x x   x   x    
Netherlands (signed on 06.07.1976) 12.12.1977  x   x x  x     x    
New Zealand (signed on 18.06.1996) 29.10.1998  x   x x x     x    
Nigeria (signed on 06.09.2005) 25.09.2008  x   x x      x x    
Oman (initialed on 01.07.2012)  x   x x     x   x  
Panama (signed on 25.05.2007) 11.01.2010  x   x x      x x    
Paraguay (signed on 20.12.1952, new ASA initialed on 29.06.2007)  20.05.1954  x   x x     x   x  
Peru (signed on 11.12.2009) 21.08.1957  x   x x    x  x x  x  
Poland (signed on 13.03.2000) 14.11.2007     x x x     x    
Portugal (signed on 11.11.2002) 08.03.2007  x   x  x     x    
Qatar (initialed on 04.05.2006)  x   x x     x   x  
Russian Federation (signed on 22.01.1993, new ASA initialed on 
09.02.2011) 07.11.1995  x   x x      x x    
Scandinavia (Denmark, Norway, and Sweden) (signed on 18.03.1969)  
     Denmark, Norway 
     Sweden  
19.02.1970 
08.12.1969 x   x  x     x    
Senegal (16.05.2007)  06.11.2009  x   x x    x   x    
Singapore (signed on 25.11.2008, new ASA initialed on 27.06.2008)  02.09.1999  x   x x     x   x  
South Africa (signed on 26.11.1996) 17.10.2001  x   x x    x   x    
Spain (signed on 28.11.1949, new ASA initialed on 13.07.2007)  11.03.1954  x   x x   x   x    
Suriname (signed on 28.01.1980, new ASA initialed on 21.08.2009)  13.07.1983  x   x x    x  x x  x  
Swiss (signed on 29.07.1998) 02.01.2001  x   x x   x   x    
Thailand (signed on 21.03.1991) 22.06.1994  x     x     x    
Tanzania (initialed on 30.08.1989)  x     x     x    
Trinidad and Tobago (signed on 23.07.2008)  x    x    x   x    
Turkey (signed on 21.09.1950, new ASA initialed on 11.05.2006)  29.03.1952  x   x x   x   x    
Ukraine (signed on 02.12.2009)     x x    x   x     
  WT/TPR/S/283 • Brazil  
 
- 194 - Partner (signature) Entry into 
force 
 
 Traffic rights 
(freedoms) Cooperationa/ 
Multiple 
designationb Pricing Capacity 5th 
7th 
cabotage 
Cooperative 
arrangements 
Multiple 
Designation 
Dual approval 
Dual 
disapproval 
Country of 
origin 
Zone pricing 
Free pricing 
Pre-
determination 
Bermuda I 
Free 
determination 
Other 
United Arab Emirates (initialed on 09.06.2004)  x   x x     x     
United Kingdom (signed on 31.10.1946, new ASA initialed on 
22.10.2008) 18.08.1950  x   x x      x x    
United States (signed on 19.03.2011) 07.02.1992  x   x X     x x    
Uruguay (signed on 10.03.2009) 11.01.2011  x   x X    x  x x  x  
Venezuela (signed on 30.09.2008) 10.10.1991  x   x X   x   x    
Zimbabwe (initialed on 11.03.2010)  x   x X      x   x  
a One party's airlines may sign code-share and other cooperation agreemen ts with the other party's airlines and with third coun tries' airlines. 
b Parties are allowed to grant authorization to more  than one airline to exploit the rights agreed. 
Source:  WTO Secretariat, based on information provided by ANAC.  
 
 
__________