RESTRICTED  
  
WT/TPR/S/358  
12 June 2017  
(17-3104) Page: 1/180 
Trade Policy Review Body   
 
  
TRADE POLICY REVIEW  
REPORT BY THE SECRET ARIAT  
BRAZIL 
This report, prepared for the seventh  Trade Policy Review of Brazil, has been drawn up by the 
WTO Secretariat on its own responsibility. The Secretariat has, as required by the Agreement 
establishing th e Trade Policy Review Mechanism (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 Mess rs. Serg ios Stamnas 
(tel: 022/739 5382) and Rosen Marinov (tel: 022/739 6391).  
 
Document WT/TPR/G/358 contains the policy statement submitted by Brazil.  
 
 
Note: This report is subject to restricted circulation and press embargo until th e 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/358 • Brazil  
 
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  CONTENTS  
SUMMARY  ................................ ................................ ................................ ........................  7 
1   ECONOMIC ENVIRONMENT  ................................ ................................ ........................  12 
1.1   Main Features of the Economy  ................................ ................................ ..................... 12 
1.2   Recent Economic Developments  ................................ ................................ ................... 13 
1.2.1    Overview  ................................ ................................ ................................ ................ 13 
1.2.2    Monetary and exchange rate policy  ................................ ................................ ............ 15 
1.2.3    Fiscal p olicy ................................ ................................ ................................ ............ 15 
1.2.4    Labour market policies  ................................ ................................ ............................. 17 
1.2.5    Balance of payments  ................................ ................................ ................................ 17 
1.3   Developments in Trade and Investment  ................................ ................................ ........ 18 
1.3.1    Trends and patterns in merchandise and services trade  ................................ ................ 18 
1.3.1.1    Merchandise trade  ................................ ................................ ................................ .18 
1.3.1.2    Services trade  ................................ ................................ ................................ ......21 
1.3.2    Trends and patterns in FDI  ................................ ................................ ....................... 21 
2   TRADE AND INVESTMENT  REGIMES ................................ ................................ ...........  25 
2.1   General Constitutional and Institutional Framework  ................................ ........................ 25 
2.2   Structure of Trade Policy Formulation  ................................ ................................ ............ 26 
2.2.1    Executive branches of government ................................ ................................ ............. 26 
2.2.2    Advisory, planning and other bodies  ................................ ................................ ........... 27 
2.3   Trade Policy Objectives  ................................ ................................ ............................... 27 
2.4   Trade Laws and Regulations  ................................ ................................ ......................... 28 
2.4.1    Regulatory framework and reform  ................................ ................................ ............. 28 
2.4.2    Transparency  ................................ ................................ ................................ .......... 29 
2.5   Trade Agreements and Arrangements  ................................ ................................ ........... 31 
2.5.1    WTO ................................ ................................ ................................ ...................... 31 
2.5.2    Regional and preferential trade agreements (RTAs and PTAs)  ................................ ........ 32 
2.5.2.1.1    MERCOSUR  ................................ ................................ ................................ .......36 
2.5.2.1.2    Other arrangements  ................................ ................................ ........................... 37 
2.6   Foreign Investment Regime  ................................ ................................ ......................... 37 
3   TRADE POLICIES AND P RACTICES BY MEASURE  ................................ ........................  41 
3.1   Measures Directly Affecting Imports  ................................ ................................ .............. 41 
3.1.1    Customs procedures, valuation, and requirements  ................................ ....................... 41 
3.1.2    Rules of origin  ................................ ................................ ................................ ......... 44 
3.1.3    Tariffs  ................................ ................................ ................................ .................... 45 
3.1.3.1    Applied MFN tariff  ................................ ................................ ................................ .45 
3.1.3.2    Bindings  ................................ ................................ ................................ .............. 49 
3.1.3.3    Preferences  ................................ ................................ ................................ .......... 49 
3.1.4    Other charges affecting imports  ................................ ................................ ................. 50 
3.1.5    Import prohibitions, restrictions, and licensing  ................................ ............................ 53 WT/TPR/S/358 • Brazil  
 
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  3.1.6    Anti-dumping, countervailing, and safeguard measures  ................................ ................ 55 
3.1.7    Other measures  ................................ ................................ ................................ .......57 
3.2   Measures Directly Affecting Exports  ................................ ................................ .............. 57 
3.2.1    Customs procedures and requirements  ................................ ................................ .......57 
3.2.2    Taxes, charges, and levies  ................................ ................................ ........................ 58 
3.2.3    Export prohibitions, restrictions, and licensing  ................................ ............................. 58 
3.2.4    Export support and promotion  ................................ ................................ ................... 59 
3.2.4.1    Export support schemes  ................................ ................................ ........................ 59 
3.2.4.2    Export -processing zones  ................................ ................................ ........................ 61 
3.2.4.3    Export pr omotion  ................................ ................................ ................................ ..61 
3.2.5    Export finance, insurance, and guarantees  ................................ ................................ ..62 
3.3   Measures Affecting Production and Trade  ................................ ................................ .......66 
3.3.1    Incentives  ................................ ................................ ................................ ............... 66 
3.3.1.1    Overview  ................................ ................................ ................................ ............. 66 
3.3.1.2    Free-trade zones  ................................ ................................ ................................ ...68 
3.3.1.3    Federal financing facilities  ................................ ................................ ...................... 70 
3.3.1.4    Research and development (R&D) programmes  ................................ ........................ 72 
3.3.2    Standards and other technical requirements  ................................ ............................... 73 
3.3.3    Sanitary and phytosanitary requirements  ................................ ................................ ....75 
3.3.4    Competition policy and price controls  ................................ ................................ ......... 78 
3.3.4.1    Competition policy  ................................ ................................ ................................ 78 
3.3.4.2    Price controls ................................ ................................ ................................ ........ 80 
3.3.5    State trading, state -owned enterprises, and privatization  ................................ ............. 81 
3.3.6    Government procurement  ................................ ................................ ......................... 82 
3.3.7    Intellectual property rights  ................................ ................................ ........................ 85 
3.3.7.1    Overview  ................................ ................................ ................................ ............. 85 
3.3.7.2    Industrial property  ................................ ................................ ................................ 88 
3.3.7.3    Copyright  ................................ ................................ ................................ ............. 89 
3.3.7.4    Enforcement  ................................ ................................ ................................ ......... 89 
4   TRADE POLICIES BY SE CTOR  ................................ ................................ .....................  91 
4.1   Agriculture, Forestry, and Fisheries  ................................ ................................ ............... 93 
4.1.1    Main features  ................................ ................................ ................................ .......... 93 
4.1.2    Policy and institutional framework  ................................ ................................ .............. 94 
4.1.3    Border measures  ................................ ................................ ................................ .....95 
4.1.4    Domestic support ................................ ................................ ................................ .....96 
4.1.4.1    Agricultural/rural credit  ................................ ................................ .......................... 98 
4.1.4.1.1    Minimum price guarantees  ................................ ................................ ................  103 
4.1.4.1.2    Measures to promote family farming  ................................ ................................ ... 106 
4.1.4.1.3    Other measures  ................................ ................................ ...............................  107 
4.2   Energy  ................................ ................................ ................................ ....................  109 WT/TPR/S/358 • Brazil  
 
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  4.2.1    Main features  ................................ ................................ ................................ ........  109 
4.2.2    Policy and institutions ................................ ................................ .............................  109 
4.2.3    Hydrocarbons and bi ofuels  ................................ ................................ ......................  110 
4.2.3.1    Oil ................................ ................................ ................................ .....................  110 
4.2.3.1.1    Main features  ................................ ................................ ................................ ... 110 
4.2.3 .1.2   Upstream – Exploration and production (E&P) arrangements  ................................ . 111 
4.2.3.1.3    Downstream  ................................ ................................ ................................ .... 113 
4.2.3.2    Gas ................................ ................................ ................................ ...................  114 
4.2.3.3    Biofuels  ................................ ................................ ................................ .............  115 
4.2.3.3.1    Ethanol  ................................ ................................ ................................ ...........  115 
4.2.3.3.2    Biodiesel  ................................ ................................ ................................ .........  117 
4.2.4    Electricity  ................................ ................................ ................................ .............  118 
4.2.4.1    Main features  ................................ ................................ ................................ ..... 118 
4.2.4.2    Policy a nd institutions  ................................ ................................ ..........................  119 
4.2.4.3    Regulatory and operational aspects  ................................ ................................ ....... 120 
4.3   Manufacturing  ................................ ................................ ................................ ..........  123 
4.3.1    Main features  ................................ ................................ ................................ ........  123 
4.3.2    Policy and institutions ................................ ................................ .............................  123 
4.3.3    Border measures  ................................ ................................ ................................ ... 124 
4.3.4    Domestic support ................................ ................................ ................................ ... 124 
4.3.5    Automotive sector  ................................ ................................ ................................ .. 126 
4.3.6    Other activities  ................................ ................................ ................................ ...... 129 
4.4   Services  ................................ ................................ ................................ ..................  130 
4.4.1    Main features  ................................ ................................ ................................ ........  130 
4.4.2   Commitments under the General Agreement on Trade in Services and RTAs  .................  131 
4.4.3    Financial services  ................................ ................................ ................................ ... 132 
4.4.3.1    Banking a nd finance  ................................ ................................ ............................  133 
4.4.3.2    Insurance  ................................ ................................ ................................ ..........  137 
4.4.4    Telecommunications  ................................ ................................ ...............................  139 
4.4.5    Transport  ................................ ................................ ................................ ..............  146 
4.4.5.1    Air transport  ................................ ................................ ................................ ....... 147 
4.4.5.1.1    Airline services  ................................ ................................ ................................  147 
4.4.5.1.2    Airport and auxiliary services  ................................ ................................ .............  150 
4.4.5.2    Maritime transport and ports  ................................ ................................ ................  151 
4.4.5.2.1    Shipping  ................................ ................................ ................................ .........  151 
4.4.5.2.2    Port services  ................................ ................................ ................................ .... 154 
4.4.6    Distribution and e -commerce  ................................ ................................ ..................  156 
4.4.6.1    Distribution  ................................ ................................ ................................ ........  156 
4.4.6.2    E-commerce  ................................ ................................ ................................ ....... 156 
4.4.7    Tourism  ................................ ................................ ................................ ................  158 WT/TPR/S/358 • Brazil  
 
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  4.4.8    Professional services  ................................ ................................ ..............................  159 
4.4.8.1    Legal services  ................................ ................................ ................................ ..... 160 
4.4.8.2    Accounting and auditing servi ces ................................ ................................ ..........  161 
4.4.8.3    Architectural and urban planning services  ................................ ..............................  161 
4.4.8.4    Medical services  ................................ ................................ ................................ .. 162 
5   APPENDIX TABLES  ................................ ................................ ................................ .. 164  
CHARTS  
 
Chart 1.1 Product composition of merchandise trade, 2012 and 2016  ................................ .......19 
Chart 1.2 Direction of merchandise trade, 2012 and 2016  ................................ ....................... 20 
Chart 3.1 Frequency distribution of MFN tariff rates, 2017  ................................ ....................... 46 
Chart 3.2 Tariff escalation, by 2 -digit ISIC industry, 2017  ................................ ....................... 47 
Chart 3.3 Average applied and bound tariff rates, by HS section, 2017  ................................ .....49 
Chart 3.4 Product coverage of selected preferential agreements, 2016  ................................ .....50 
Chart 3.5 ZFM trade balance, 2012 -16 ................................ ................................ ................. 69 
Chart 3.6 ZFM expenditure on inputs and sales revenue, 2012 -16................................ ............ 70 
Chart 3.7 Industrial property applications and decisions, 2013 -16 ................................ ............ 88 
Chart 4.1 Main agricultural exports, 2012 -16 ................................ ................................ ......... 94 
Chart 4.2 Interest rate spread, January 2008 to December 2016  ................................ ...........  136 
TABLES  
 
Table 1.1 Basic economic and employment indicators, 2012 -16 ................................ ............... 12 
Table 1.2 Selected macroeconomic indicators, 2012 -16 ................................ .......................... 13 
Table 1.3 Public sector fiscal balance, 2012 -16 ................................ ................................ ......16 
Table 1.4 Balance of payments, 2012 -16 ................................ ................................ .............. 18 
Table 1.5 Foreign direct investment (equity) inflows by sector, 2012 -16 ................................ ...21 
Table 1.6 Foreign direct investment (equity) inflows by trading partner, 2012 -16 ...................... 22 
Table 1.7 Foreign direct investment (equity) outflows by sector, 2012 -16 ................................ .23 
Table 1.8 Foreign direct investment (equity) outflows by trading partner, 2012 -16 .................... 24 
Table 2.1 WTO dispute settlement cases involving Brazil, January 2013 -April 2017  .................... 32 
Table 2.2 Brazil's RTAs and PTAs in force: main features 2017 ................................ ................. 33 
Table 2.3 Indicative list of FDI closed and restricted sectors, 2017  ................................ ........... 39 
Table 3.1 Distribution of IDs by risk a ssessment channel, 2013 -16 ................................ .......... 43 
Table 3.2 Structure of the MFN tariff schedule, 2012 and 2017  ................................ ................ 45 
Table 3.3 Summary analysis of Bra zil's MFN tariff, 2017  ................................ ......................... 47 
Table 3.4 Federal tax revenue, by main sources, 2012 -16 ................................ ....................... 51 
Table 3.5 Forgone federal tax revenue, 2013 -17 ................................ ................................ ....53 
Table 3.6 Import prohibitions, 2017  ................................ ................................ ..................... 53 
Table 3.7 Trade remedy actions, 2013 -16 ................................ ................................ ............. 56 
Table 3.8 Export taxes, 2013 -17 ................................ ................................ .......................... 58 
Table 3.9 Drawback regime implementation, 2013 -16 ................................ ............................ 60 WT/TPR/S/358 • Brazil  
 
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  Table 3.10 PROE X implementation, 2013 -16 ................................ ................................ ......... 63 
Table 3.11 BNDES total disbursements for exports of goods and services, 2013 -16 .................... 64 
Table 3.12 SCE/F GE activity, 2013 -16 ................................ ................................ .................. 66 
Table 3.13 Subsidy programmes notified to the WTO, 2011 and 2012  ................................ ......68 
Table 3.14 Brazilian development ban k support, 2013 -16 ................................ ....................... 70 
Table 3.15 BNDES disbursements by credit scheme, 2013 -16 ................................ .................. 71 
Table 3.16 Sectoral science, technology and in novation (S, T&I) funds, 2017  ............................ 72 
Table 3.17 Competition enforcement, 2013 -16 ................................ ................................ ......79 
Table 3.18 Regulated prices, 2017  ................................ ................................ ....................... 80 
Table 3.19 Key features of federal state -owned enterprises (SOEs), 2017  ................................ .81 
Table 3.20 Product -specific preference margins in public tenderi ng, 2017  ................................ .84 
Table 3.21 Federal administration procurement, by methods, 2013 -16 ................................ .....85 
Table 3.22 National IPR legislation, 2017  ................................ ................................ .............. 86 
Table 4.1 Brazil's agribusiness trade balance, 2010 -16 ................................ ........................... 93 
Table 4.2 Agricultural support, by commodity, 2012 -15 ................................ .......................... 97 
Table 4.3 Direct payment and general services support, 2012 -15 ................................ ............. 97 
Table 4.4 Federal Government agricultural support programmes, 2013 -16 (preva iling 
norms for crop -year 2016/17)  ................................ ................................ ............................. 98 
Table 4.5 Sources of agricultural/rural credit, 2010 -16 ................................ .........................  101 
Table 4.6 Price support progra mmes, 2014/2015 and 2015/16  ................................ ..............  103 
Table 4.7 PGPM operations, 2013 -16 ................................ ................................ ..................  105 
Table 4.8 Budget allocated to family farming programmes a nd measures, harvest year 
2012/13  ................................ ................................ ................................ .........................  106 
Table 4.9 Regulatory framework for oil and gas exploration and production, 2017  ....................  111 
Table 4.10 Timetable for compliance with INOVAR -Auto Programme requirements, 
2013-17 ................................ ................................ ................................ .........................  127 
Table 4.11 Structure of the financial system, 2010 -16 ................................ ..........................  132 
Table 4.12 Banking soundness indicators, 2012 -16 ................................ ..............................  135 
APPENDIX TABLES  
 
Table A1.1 Merchandise exports, by group of products, 2012 -16 ................................ ............  164 
Table A1.2 Merchandise imports by group of products, 2012 -16 ................................ ............  165 
Table A1.3 Merchandise exports by destination, 2012 -16 ................................ ......................  166 
Table A1.4 Merchandise imports by origin, 2012 -16 ................................ .............................  167 
Table A1.5 Trade in services, 2012 -16 ................................ ................................ ................  168 
 
Table A2.1 Notifications to the WTO, 1 January 2013 -4 April 2017  ................................ .........  169 
 
Table A3.1 BNDES selected export finance programm es, 2017  ................................ ..............  171 
Table A3.2 Selected federal incentive schemes, 2017  ................................ ...........................  172 
 
Table A4. 1 Domestic agricult ural support notified to the WTO, 2014/15  ................................ . 173 
Table A4.2 Brazil's air transport agreements and related action, 2016  ................................ .... 174 WT/TPR/S/358 • Brazil  
 
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  SUMMARY  
1. Since its previous Trade Policy  Review in 201 3, Brazil 's largely domestic demand -driven 
economy  slowed down and  entered a severe recession in 2015 -16, triggered by deteriorating 
terms of trade and exacerbated  by a bout of political uncertainty. Annual  GDP growth dropped 
from 3% in 2013 to 0.9% in 2014 and then turned negative in 2015 and 2016  with consumption 
and gross fixed capital formation following a similar trend . The recession, one of the most severe 
in Brazil's history, has been accompanied by a steep rise in inflation (8.7% in 20 16) and 
unemployment (11.3% in 2016)  as well as fiscal discipline challenges.  While the Brazilian financial 
system was not significantly impact ed by the economic downturn, domestic lending became more 
cautious and borrower demand decreased.  
2. During the revi ew period, trade and trade -related reform  initiative s aimed at buttressing 
growth were undertaken in several areas , including in trade facilitation, anti -dumping, production 
and trade incentives  (e.g., SME support ), state -owned enterprises, energy, manufac turing, 
transport infrastructure, and more are under consideration . Monetary policy interventions were 
calibrated to contain inflation, which remained at the upper limit of the tolerance range established 
by the Central Bank of Brazil (BCB) during most of the period under review. The easing of 
inflationary pressures since October 2016 has enabled the BCB to progressively cut its policy rate 
from a peak of 14.15%, which should help rekindle growth. The BCB has not sought to influence 
the exchange rate, limit ing its currency market interventions to containing excessive short -term 
volatility. During 2013 -15, the real depreciated by around 20% in real effective terms, moving 
towards levels more consistent with fundamentals, but appreciated by around 6% in 2016.  
3. Fiscal policy has experienced  difficulties responding  to the severe economic downturn and 
public expenditure pressures arising from Brazil's demographic dynamics . As a result, the federal 
budget's primary balance registered widening deficits during 2014 -16, interrupting a decade -long 
succession of surpluses. The downward trajectories of gross and net public sector debt were also 
reversed, with respective increases from 51.5% to 69.9% of GDP and from 30.5% to 46.2% of 
GDP between 2013 and 2016. The loss of i nvestment grade in the last quarter of 2015 did not 
trigger much volatility in public debt management, due to low levels of exposure to foreign 
currencies and overseas investors. The authorities have taken steps towards fiscal consolidation,  
including meas ures to improve the management of public finances and state -controlled 
enterprises, and the adoption of a New Fiscal Regime in December 2016. Nevertheless, structural 
deficiencies, such as the complex and burdensome tax system, and federal and sub -federal budget 
rigidities, are yet to be addressed.  
4. The Brazilian economy remains inward oriented, with aggregate two -way trade in goods and 
services representing about 25% of GDP throughout the review period. International trade and 
foreign direct investment (FDI ) trends reflect the continued importance of the European Union  as 
Brazil's main supplier and a key destination market, although in 2015 China became the single 
most important destination  for Brazilian merchandise exports. Brazil continued to attract sizab le 
FDI inflows, ranging between 2% and 3.3% of GDP, which fully financed the current account deficit 
in both 2015 and 2016 . 
5. Brazil remains open to and encourages inward FDI, which is prevalent across the economy. 
There are several sector -specific foreign o wnership prohibitions (certain postal services, and 
nuclear energy) or limitations (e.g. air transport, financial institutions, health services, rural land 
acquisition, broadcasting and publishing media, fishing, mining , and hydrocarbons exploration). 
During the review period, certain healthcare services were further opened to FDI. In addition, a 
new model of investment agreements, built upon UNCTAD and OECD guidelines, was used to 
negotiate and sign a series of bilateral investment, promotion and protectio n treaties whose 
ratification is under way.  
6. Since its last TPR in 2013, Brazil undertook several constitutional amendments including one 
related to curbing public spending growth. The institutional framework for trade policy formulation 
remained broadly u nchanged except for the transfer of the Executive Secretariat of the Foreign 
Trade Board (CAMEX) from the Ministry of Industry, Foreign Trade and Services to the Ministry of 
Foreign Affairs.  
7. The overall thrust of Brazil's trade and trade -related policies has not changed during most of 
the period under review. Their stated trade and trade -related policy objectives have been those of 
integration into global value chains and raising the competitiveness of domestic products. WT/TPR/S/358 • Brazil  
 
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  Notwithstanding some adjustments, inter alia , due to the recent economic slowdown, its 
longstanding programmes aimed at fostering technological development, shielding certain 
domestic producers from external competition, attracting investment , and promoting and 
diversifying exports, remain relatively unchanged.  
8. Brazil remains committed to, and an active participant in, the multilateral trading system. 
During the review period, it improved its WTO commitments by ratifying the Trade Facilitation 
Agreement (TFA) and depositing its instrument of  acceptance of the Fifth Protocol on Financial 
Services. It now also grants preferential treatment to services and service suppliers from least 
developed countries (LDCs). During the review period, Brazil made many notifications to the WTO , 
though most of its trade agreements under the Latin America Integration Association (LAIA) have 
not yet been reviewed ; according to the authorities, action is being taken to address this matter. 
Brazil was directly involved in seven WTO disputes, five as a complainant an d two as a respondent.  
9. While Brazil continues to work on strengthening regional economic integration through RTAs 
negotiated within the framework of the Southern Common Market (MERCOSUR) and the Latin 
American Integration Association (LAIA), it has also pl aced emphasis on RTAs negotiated with 
trading partners outside the region. During the review period, three agreements entered in to force 
(Bolivarian Republic of Venezuela, Guyana/ Saint Kitts and Nevis,  and Southern African Customs 
Union), four were conclud ed with their entry in to force pending (Egypt, Colombia, Palestine, and 
Peru), and two (European Union, and Mexico) are still being negotiated. The lack of a common 
nomenclature for tariff preferences granted by Brazil under its RTAs  undermines their 
compr ehension and full utilization by traders ; consequen tly, the share of aggregate preferential 
imports in Brazil's total imports remains rather modest, ranging between 13% and 14.5% during 
2013-16. 
10. No major regulatory reform was undertaken during the review p eriod. The trade -related 
regulatory policy agenda remains strongly focused on procedural aspects within competent 
agencies, rather than on an overall simplification of the relatively complex regulatory system. 
Carrying out regulatory impact assessments (RI A) is not yet a consistent practice across the whole 
administration. Negative economic growth and fiscal scarcity brought the issue of improving the 
regulatory system to a strategic position in the policy agenda, so as to attract investment, raise 
competit iveness and create jobs. Brazil attaches importance to making laws transparent and 
readily accessible, including by foreigners; additional efforts have been undertaken to make trade 
and trade -related information available online.  
11. The tariff remains one of  Brazil's main trade policy instruments, and a significant, albeit 
declining, source of tax revenue (3.6% of total fiscal revenue in 2016) . Brazil applies the 
MERCOSUR Common External Tariff (CET), with some country -specific derogations . It grants at 
least most-favoured -nation (MFN) tariff treatment to all trading partners. Brazil's 2017 applied 
MFN tariff is entirely ad valorem  and comprises 19 bands, with rates ranging from zero to 55%. 
The simple average applied MFN tariff declined slightly from 11.7% in  2012 to 11.6% in 2017; for 
dutiable lines, the decline was from 12.7% to 12.6%. During the review period, Brazil phased out 
the higher -than-CET rates introduced in 2012 on 100 tariff lines under a temporary MERCOSUR 
mechanism.   
12. Brazil bound its entire tar iff during the Uruguay Round at rates between zero and 55% for 
agricultural products (WTO definition), and from zero to 35% for non -agricultural products. The 
gap between the average bound and applied rates is some 18.5 percentage points. Applied MFN 
rates on some 134 tariff lines (up from 120 in 2012) exceed, sometimes partially (due to 
differences in aggregation levels), Brazil's bindings , inter alia , due to CET commitments; in these 
cases the importer may request application of the bound rate.  
13. During th e review period , in addition to ratifying the TFA, Brazil took steps to upgrade its 
single window and its authorized economic operator programme. Brazil maintains a system of 
automatic and non -automatic licences for imports of various products, regardless of their origin. At 
end-2016, imports classifiable under some 137 tariff lines were subject to automatic licensing, 
whereas imports subject to non-automatic licensing requirements spanned at least 5,460 tariff 
lines (more than half of Brazil's entire tarif f). Import licences must be obtained prior to customs 
clearance; if non-automatic licensing requirements apply, importers are generally advised to 
obtain the licence before the goods are shipped. Non -automatic licensing is also used in the 
administration o f duty and tax concessions, whereby imports must undergo a "similarity exam" to 
ascertain that no equivalent domestic production exists.  WT/TPR/S/358 • Brazil  
 
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  14. Brazil remains a significant user of trade remedies, particularly anti -dumping (AD) 
measures. During the period under r eview, 123 new AD investigations were initiated, and at 
31 December 2016 , 163 definitive AD measures were in place, covering a wide range of sectors. 
The regulatory framework for investigation and application of AD measures was amended in 2013 
with a view to strengthening trade defence. The main innovations included: mandatory preliminary 
determinations; refinements to the definition of domestic industry; a lower industry 
representativeness threshold for the admissibility of AD investigation requests; retro active 
application of AD duties; and formalization of on -site investigation procedures. As from 
end-July 2015, administrative procedures relating to AD investigations have been  carried out 
electronically.  
15. Brazil's legal and institutional framework relat ing to the implementation and administration 
of the TBT Agreement remained broadly unchanged during the review period. Brazil's approach to 
granting equivalence remains based on the acceptance of test results, without explicit recognition 
of foreign technical  regulations. Most technical regulations enacted in Brazil are based on 
international or MERCOSUR standards; whenever this is not the case, they are based on 
performance criteria. Proposed technical regulations deemed to have trade effects are forwarded 
to the WTO for Members' comments; during the review period, most such notifications were made 
less than 60  days before entry into force.  
16. Brazil's sanitary and phytosanitary system is based on risk analysis which  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. Brazil maintains an Importation Alert Regime (RAI) targeting foreign establishments wh ose 
shipments of animal products have been found to be non -compliant with Brazilian SPS 
requirements.  
17. Export taxes remain in place for raw hides and skins, cigarettes, and arms and ammunition.  
Brazil maintains a number of programmes intended to enhance the  competitiveness of 
export -oriented companies, in particular small -scale enterprises, and to increase exports. A 
number of finance, insurance, and guarantee schemes offering attractive interest rates and other 
conditions are available to exporters. Among t he main instruments are the Export Financing 
Programme (PROEX) and the export credit schemes under the BNDES -EXIM programme. The latter 
is geared to wards  promot ing exports with local value added, and the stated conditions for 
participation often include do mestic -content/production thresholds. According to the Brazilian 
authorities , these conditions only apply to securing automatic eligibility for financing.  
18. Brazil's internal taxation regime remains overly complex, including in the treatment of 
imported goo ds and services ; customs duties and other taxes on foreign trade transactions 
account up to 15% of federal tax revenue . Domestic and cross -border transactions are subject to 
various federal and sub -federal levies; their cross -cumulation for tax base purpos es is not 
uncommon.  Incentives and government assistance for production and trade are available at both 
the federal and sub -federal levels. The scope of Brazil's incentive programmes may be regional, 
sectoral , or outcome -specific (e.g.  fostering research).  The range of support measures includes: 
administered interest rate or concessional financing ; tax concessions; financial contributions; 
accelerated depreciation; guarantees; grants; advisory services; and credit insurance. Incentives 
granted in the contex t of certain programmes promoting information technology, 
telecommunications and automation goods are linked to Basic Productive Process (PPB) criteria, 
which are product -specific and stipulate which stages of the respective manufacturing process 
must be c arried out in Brazil. Incentives conditional on compliance with PPB criteria are also 
granted within designated free -trade zones, with a view to promoting the development and 
regional integration of border areas in Brazil's north region.  
19. Brazil,  a non-party to the plurilateral Agreement on Government Procurement , maintains a  
decentralized system of independent procurement jurisdictions at all levels of government that 
share a common set of rules established by the Federal Government. Tendering via reverse 
auction is the main mode of awarding contracts. In case of equivalent offers, the legislation allows 
for preferences for goods and services produced in Brazil, or produced/supplied by domestic  
companies or by companies that invest in technology development in Brazil. The preferential 
treatment may include quotas, preference margins, as well as tendering procedures completely 
restricted to small enterprises based in Brazil. Specific provisions regulate the preferences 
applicable to micro and small enterprises , and to PPB-compliant goods and services. Seventeen WT/TPR/S/358 • Brazil  
 
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  decrees establishing public procurement preference margins, ranging from 8% to 25%, for various 
PPB-compliant products, expired at end -December 2016  and March and June 2017 . 
20. The Federal Government still controls a relatively large number of companies with 
commercial activities in a wide range of industries, including hydrocarbons, electricity, port 
services, financial services, transportation, telecommunications, and health services. Some federal 
state-owned enterprises (SOEs) continue to hold dominant positions in their respective markets. In 
addition, there are many "public companies" owned or controlled by state and municipal 
governments. In 2016, Brazil amended the legal status of enterprises with publ ic participation at 
any level of government, with a view to strengthening their governance and transparency, 
including in procurement operations.  
21. Brazil's intellectual property rights (IPR) legislation covers all the major aspects covered by 
the TRIPS Agre ement. In some areas, including copyright, rights exceed the minimum terms laid 
down in the Agreement. It continues to struggle with significant backlogs and delays in the 
processing of applications for IPR protection, which may be hampering technological innovation.  
Protection was further enhanced with the expansion of international commitments, and the 
introduction of penalty  provisions for infractions in certain areas . 
22. Brazil remains a major player in the global trade of certain agricultural commodities.  During 
the review period, the sector's share in gross value added (5.5% in 2016) remained relatively 
stable, and labour productivity seemingly low, compared to the rest of the economy. The average 
MFN tariff for agricultural products (10.2%) remains  uncha nged and the 55% peak rate of the 
Customs Tariff affects only desiccated coconuts. Although it continues to provide a low and 
decreasing level of support to its agricultural producers compared with other countries, Brazil 
maintains several domestic support  measures, including administered interest rate and 
concessional credit lines (e.g. under the equalization principle), price support mechanisms , and 
crop insurance premium support to which  emphasis has lately  been shifted. Mandatory bank 
reserve requiremen ts for the financing of agricultural activities remain in place. The high level of 
rural debt ,  a major challenge ,  is being addressed. A state company continues to be involved in 
the operation of some agricultural policy measures (e.g. storage and minimum  price guarantees).  
23. Brazil, a net exporter of crude oil with one of the greenest energy matrixes in the world, 
remains nearly self -sufficient in primary energy production. Its state -controlled PETROBRAS has 
maintained its dominant position both in upstream  and downstream hydrocarbons activities . To 
address fuel sales -related financial losses, in 2016 , PETROBRAS, a price setter in the domestic 
fuels market, implemented a new pricing policy for gasoline and diesel at the refinery gate. Tax 
incentives for oil and gas exploration and production remain in place. T he requirement for a 
minimum 30% stake of PETROBRAS in pre -salt fields  – which together with local content 
requirements seem s to have caused development delays  – and PETROBRAS ' right to be the sole 
opera tor in pre -salt oil reserves were removed in November 2016. Efforts to reform the local 
content regime in this area are also under way . Biofuel production, an activity subject to 
cross-subsidization elements, continued to be assisted, inter alia , through: support to sugarcane 
production and fuel -flex cars; lending incentives to expand the industrial capacity for sugar and 
ethanol production; and, increased mandatory blending ratios for both gasoline and diesel. The 
state-owned ELETROBRAS continues to play a  major role in the electricity sector and an alternative 
bidding criterion for concessions of hydropower plants was introduced . Since 2015 , a tariff flag 
system has been applied allowing the monthly pass -through of the extra costs of generating 
thermal ene rgy to consumers. Electricity tariffs, set by the regulator ANEEL, continue to ensure 
cross-subsidization among different consumer categories; in addition, the tax burden on end -user 
electricity tariffs remains significant and differs greatly across consum er groups.  
24. Manufacturing remains large (11.7% of gross value added, 2016), albeit declining, and 
diversified. Activities are either thriving or facing hard times, partly because of their weak 
integration into the world economy (e.g. the automotive  industr y) as several structural issues, 
including the so -called "Brazil cost", continue to affect the sector's competitiveness. A 2016 More 
Productive Brazil initiative is aimed at implementing lean manufacturing principles to raise 
productivity levels. The avera ge MFN applied tariff for manufacturing products (11.8%) remains 
virtually unchanged . Clothing, textiles, and transport equipment continue to benefit from the 
activity's highest tariff protection (35%), the main tool in an apparent tariff -jumping policy to  
attract FDI. In addition to several export incentives, remission of duties and taxes on exports 
under the Reintegra scheme, originally due to expire at end -2013, were made permanent. WT/TPR/S/358 • Brazil  
 
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  Domestic support remain ed in place in the form of tax and other non -tax incentives including 
administered interest rate or concessional loans, rental subsidies , and temporarily expanded 
government procurement preferences to local suppliers. Production step -related local content 
requirements tied to domestic support measures co ntinue to shield domestic producers from 
foreign competition. Industry -specific incentives were continued for some sectors, including the 
automotive (INOVAR -Auto, until 2017), information technology, aeronautic, fertilizer , and 
pharmaceutical  industries . Action was taken to reduce tariffs of cell -powered and electric cars , 
while the duty -free treatment of motor vehicles from Argentina,  Mexico and Uruguay  was delayed 
until 2019.  
25. Services, a key component of overall export competitiveness, remain the main con tributor to 
Brazil's gross value added (73.3% in 2016) and job creation . However,  despite improvements in 
certain areas , services  continue to suffer from structural weaknesses hindering the growth 
potential of the entire economy. During the review period, Brazil's GATS commitments were 
improved and three of Brazil's RTAs now contain WTO -plus services commitments. The 
Government -owned banks' share of total bank assets rose, and high interest spreads remain in 
place, inter alia , due to the lack of competitive  pressure on major banks. Although 
non-independent the Central Bank continues to enjoy administrative autonomy; legislation 
allowing for more autonomy could possibly be considered in the future.  A significant relaxation was 
undertaken of reinsurance requir ements on foreign insurance companies , such as the obligation to 
make a cession to a local reinsurer and an intra -group cession cap.  
26. Strong market competition continued to lead to further improvements in the quality and 
tariffs of telecommunication servic es. During the review period , local content requirements were 
used for auctioning radio spectrum frequencies. Certain audiovisual and broadcasting services 
remain, inter alia , subject to foreign investment limitations and local content requirements or 
preferences.  
27. Initiatives were undertaken to address transport and related infrastructure bottlenecks. The 
domestic aviation market remains highly concentrated and domestic public air transport services 
(cabotage) reserved for Brazilian legal persons. The main  commercial airports remain state owned 
and operated by a public enterprise. In maritime transport, the national flag fleet remains 
concentrated and dominated by vessels of the state company PETROBRAS . Cabotage remains 
reserved for Brazilian flag vessels, except under certain conditions. The main ports continue to be 
either operated by state or municipal governments or are administered by a public -owned firm , 
although the majority of cargo movements are undertaken by private terminals . Foreign vessels 
remai n subject to a lighthouse fee.  
28. Foreign entry in to wholesale trade services is allowed except for solid, liquid and gaseous 
fuels and related products unless domestic requirements are met, whereas commercial presence in 
retail services and franchising rema ins unrestricted. A 2014 digital marketing law established  the 
framework for the use of the Internet . Virtually all international e -purchases are charged with a 
60% flat equalization tax. In addition to existing tax incentives, tourism -specific concessiona l or 
administered interest rate finance program mes were introduced to cope with the high demand 
from the mega events hosted during the review period.  
29. Regarding professional services, bilateral arrangements were signed in 2014 (architects and 
urban planner s, Portugal), 2015 (engineers) and, 2016 (architects and urban planners, France) . 
A 2013 More Doctors Program me has allowed foreign doctors to work in Brazil without meeting the 
standard working requirements. In 2015 , healthcare services were opened to for eign investment.  
30. The Brazilian economy is projected to enter a gradual recovery in 2017, but growth is 
expected to remain weak for a prolonged period. Despite Brazil's mainly solid economic 
fundamentals, downside risks to the economic outlook remain. The e conomy remains vulnerable to 
a re-intensification of political uncertainty, as well as to delays in addressing fiscal imbalances.  
Future prosperity and sustainable growth depend on the implementation of productivity -enhancing 
structural reforms in several areas including revamping the overly complex tax and incentives 
regime and reducing the regulatory burden on businesses , as well as  closing  infrastructure gaps 
and addressing pension and labour market issues . These reforms would increase the resilience of 
the Brazilian economy, thus enabling it to continue to meet its broad -based economic and welfare 
objectives , including inclusive growth and a narrower wealth divide.  
 WT/TPR/S/358 • Brazil  
 
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  1  ECONOMIC ENVIRONMENT  
1.1  Main Features of the Economy  
1.1.  Underpinned by immense natural resourc es, a strong industrial base and a sizeable domestic 
market, the Brazilian economy is among the ten largest in the world. Economic activity is relatively 
diversified, with the GDP share of services on an upward trend and those of manufacturing and 
mining o n a downward path (Table  1.1). Despite their comparatively modest contributions to GDP, 
agriculture and mining remain important drivers of Brazilian exports.  
1.2.  The Brazilian economy is inward oriented, with aggregate two -way commercial flows in goods 
and ser vices representing about 25% of GDP throughout 2012 -16. Moreover, the share of 
exporters among  Brazilian companies is remarkably small, pointing to limited integration in to 
international value chains.1 Besides policies in favour of Brazilian -based economic  activity, these 
outcomes also reflect Brazil's relatively modest network of preferential trade agreements  and 
structural deficiencies, including gaps in physical infrastructure, limited access to long -term 
capital , and low overall skill levels.  
Table 1.1 Basic economic and employment indicators, 2012 -16 
 2012  2013  2014  2015  2016  
Real GDP at market prices (R$ billion, 1995 prices)  1,194.4  1,230.3  1,236.5  1,189.8  1,147.1  
Real GDP at market price s (US$ bil lion, 1995 prices)  611.5  570.6  525.5  357.6  328.8  
Current GDP at market price s (R$ billion)  4,814.8  5,331.6  5,779.0  6,000.6  6,266.9  
Current GDP at market price s (US$ billion)  2,465.2  2,472.8  2,456.0  1,803.6  1,796.2  
GDP per capita at curren t market price s (US$)  12,363.8  12,278.2  12,106.0  8,791.9  8,713.5  
GDP by economic activity at constant 1995 prices (%age change)  
Agriculture  -3.1 8.4 2.8 3.6 -6.6 
Mining and quarrying  -1.9 -3.2 9.1 4.8 -2.9 
Transformation/manufacturing  -2.4 3.0 -4.7 -10.4 -5.2 
Electricity, gas, water, sewage, and urban cleaning  0.7 1.6 -1.9 -1.5 4.7 
Construction  3.2 4.5 -2.1 -6.5 -5.2 
Services  2.9 2.8 1.0 -2.7 -2.7 
 Trade  2.4 3.4 0.6 -8.7 -6.3 
 Transport, storage, and courier  services  2.0 2.6 1.5 -6.6 -7.1 
 Information servicesa 7.0 4.0 5.3 -0.5 -3.0 
 Financial intermediation and insurance  1.5 1.8 -0.6 -0.8 -2.8 
 Real estate  5.1 5.1 0.7 -0.1 0.2 
 Public administration, education, and public health  1.3 2.2 0.1 -0.1 -0.1 
 Other services  3.6 1.6 1.9 -1.9 -3.1 
Value added by economic activity at current prices (%)  
Agriculture  4.9 5.3 5.0 5.0 5.5 
Mining and quarrying  4.5 4.2 3.7 2.0 1.0 
Transformation/manufacturing  12.6 12.3 12.0 11.8 11.7 
Electricity, gas, water, sewage, and urban cleaning  2.4 2.0 1.9 2.7 2.9 
Construction  6.5 6.4 6.2 5.9 5.6 
Services  69.1 69.9 71.2 72.7 73.3 
 Trade  13.4 13.5 13.6 12.8 12.5 
 Transport, storage, and courier  services  4.5 4.5 4.6 4.5 4.4 
 Information servicesa 3.6 3.5 3.4 3.2 3.1 
 Financial intermediation and insurance  6.4 6.0 6.4 7.3 8.3 
 Real estate  8.8 9.2 9.3 9.7 9.8 
 Public administration, education, and public health  15.9 16.4 16.4 17.4 17.5 
 Other services  16.5 16.9 17.4 17.7 17.6 
Structure of national employment (% of occupied population)  
Agriculture  13.3 13.1 13.4 .. .. 
Industry  12.8 12.8 12.2 .. .. 
Construction  8.5 8.6 8.7 .. .. 
Services  65.3 65.4 65.7 .. .. 
 Wholesale trade  18.4 18.1 18.4 .. .. 
 Accommodation and food supply  5.1 4.9 5.1 .. .. 
 Transport, storage, and courier  services  4.5 4.5 4.5 .. .. 
 Real estate  0.4 0.4 0.4 .. .. 
                                                
1 Otaviano Canuto, Cornelius Fleischhaker and Philip Schellekens, "The curious case of Brazil's 
closedness to trade ", Vox, 11 January  2015. Viewed at: http://voxeu.org/article/brazil -s-closedness -trade 
[30 January 2017].  WT/TPR/S/358 • Brazil  
 
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   2012  2013  2014  2015  2016  
 Financial intermediation and insurance  1.1 1.1 1.2 .. .. 
 Information servicesa 1.3 1.3 1.3 .. .. 
 Public administration  5.3 5.3 5.0 .. .. 
 Education, health, and social services  10.2 10.8 10.8 .. .. 
 Domestic service s 6.5 6.4 6.3 .. .. 
 Other collective, social, and personal services  8.5 8.7 8.8 .. .. 
 Other activities  4.0 3.9 4.0 .. .. 
.. Not available.  
a Including telecommunications; computer and related activities (excl. maintenance and repair of 
office, account ing and computing machinery); motion picture and video activities; radio and 
television activities; and news agency activities.  
Source : Instituto Brasileiro de Geografia e Estatística (IBGE) online information; IFS online information; and 
data provided by  the authorities.  
1.3.  In the decade through 2014, Brazil achieved steady economic growth coupled with poverty 
reduction and improvements in most social indicators. Healthcare coverage improved markedly, 
contributing to higher life expectancy and lower child mo rtality, and primary education enrolment 
became almost universal. Brazil's estimated Gini coefficient was also on a downward trend, 
declining from 56.88 in 2004 to 51.48 in 2014.2 Despite the extended period of economic and 
social gains, inequality remains  a problem in Brazil. Moreover, it still lags behind other advanced 
economies in terms of both the educational attainment of its workforce and the quality of its 
primary education.3 Amid high levels of workforce informality, Brazil's demographic dynamics ( a 
declining birth rate and a growing share of elderly citizens in the total population) are projected to 
put significant pressure on pension - and health -related public spending within the next decade.4 
1.4.  Various studies point out that Brazil has been underin vesting in infrastructure and R&D, and 
that private investment in both areas has been rather modest.5 Reversing the trend of 
underinvestment and creating a more dynamic business environment would make a significant 
contribution towards setting the Brazilia n economy on a higher growth path. To this end, Brazil 
would need to streamline public sector governance, both at the federal and sub -federal levels, with 
a view to: reforming the notoriously complex tax system and, inter alia , ending fiscal competition 
among federative states; moderni zing the outdated labour regime; cutting red tape and delays 
(e.g. for starting a business and for processing IPR applications); and increasing transparency, 
including in the operations of enterprises with public participation . 
1.2  Recent Economic Developments  
1.2.1   Overview  
1.5.  The Brazilian economy expanded between 2012 and  2014 but contracted markedly during 
2015-16, mainly on account of eroding confidence in the domestic policy framework, a period of 
political uncertainty triggered by co rruption investigations at PETROBRAS, and a tightening of 
credit conditions (Table  1.2). Worsening terms of trade and weak global demand also played an 
important role. The recession, one of the most severe in Brazil's history, has been accompanied by 
a steep rise in unemployment which reached 12% in December 2016 (averaging 11.3% in 2016) . 
Table 1.2 Selected macroeconomic indicators, 2012 -16 
  2012  2013  2014  2015  2016  
National accounts  (Percentage change, unle ss otherwise indicated)  
Real GDP (at 1995 prices)  1.9  3.0  0.5  -3.8  -3.6  
Consumption  3.2  3.0  1.9  -3.3  -3.5  
                                                
2 World Bank online information. Viewed at: 
http://databank.worldbank.org/data/reports.aspx?source=world -development -indicators  [21 April 2017].  
3 Ricardo de Menezes Barboza, Gilberto Borça Jr., Guilherme Tinoco de Lima Horta, João Marco Braga da 
Cunha, and  Felipe Guatimosim Maciel, A indústria, o PSI, o BNDES e algumas propostas (2017), BNDES 
discussion paper 114.  
4 IMF (2016), Brazil: Selected Issues , IMF Country Report No. 16/349.  
5 Ricardo de Menezes Barboza, Gilberto Borça Jr., Guilherme Tinoco de Lima Horta, João Marco Braga da 
Cunha, and Felipe Guatimosim Maciel, A indústria, o PSI, o BNDES e algumas propostas (2017), BNDES 
discussion paper 114.  WT/TPR/S/358 • Brazil  
 
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    2012  2013  2014  2015  2016  
Private consumption  3.5  3.5  2.3  -3.9  -4.2  
Government consumption  2.3  1.5  0.8  -1.1  -0.6  
Gross fixed capital formation  0.8  5.8  -4.2  -13.9  -10.2  
Exports of goods and non -factor services  0.3  2.4  -1.1  6.3  1.9  
Imports of goods and non -factor services  0.7  7.2  -1.9  -14.1  -10.3  
XGS/GDP (%) (at current market price s) 11.7  11.6  11.0  12.9  12.5  
MGS/GDP (%) (at curren t market price s) 13.1  13.9  13.7  14.1  12.1  
Urban unemployment rate (%)  7.3  7.2  4.9  8.3  11.3  
Inflation and interest rates (annual average)  (%) 
Inflation (CPI, % change)  5.4  6.2  6.3  9.0  8.7  
SELIC rate  12.93  12.37  15.22  17.65  18.65  
Long-term interest rate TJLP  5.50  5.00  5.00  7.00  7.50  
Non-earmarked new credit to non -financial corporations  21.53  20.65  23.85  27.98  30.34  
Earmarked new credit to non -financial corporations  9.05  7.21  7.70  9.38  11.68  
Non-earmarked new credi t to households  45.56  42.54  49.18  59.25  71.32  
Earmarked new credit to households  7.68  7.15  8.15  9.27  10.25  
Exchange rate       
R$/US$ (annual average)  1.95  2.16  2.35  3.33  3.49  
Real effective exchange rate (% change)  -10.0  -5.6  -1.0  -15.8  6.7  
Nominal effective exchange rate (% change)  -11.1  -8.0  -3.5  -20.9  0.1  
 (% of GDP, unless otherwise indicated)  
Central government balance       
Revenue  18.5  18.7  17.7  17.4  17.4  
Tax revenue  7.3  7.2  7.0  7.0  7.2  
Expenditure  16.9  17.3  18.0  19.3  19.8  
Primary balance  1.8  1.4  -0.4  -1.9  -2.5  
Overall balance  -1.3  -2.1  -4.7  -8.6  -7.6  
Gross general government debt  53.7  51.5  56.3  65.5  69.9  
Net public debt  32.2  30.5  32.6  35.6  46.2  
Net general government debt  32.8  31.1  33.2  37.9  47.8  
Saving and investment       
Gross national savings  18.0 18.3 16.0 14.4 13.9 
Private sector  17.5 18.8 18.8 .. .. 
Public sector  0.6 -0.5 -2.8 .. .. 
Gross domestic investment  21.4 21.7 20.5 17.6 15.4  
Private sector  18.7 19.0 17.6 .. .. 
Public sector  2.7 2.7 3.0 .. .. 
Saving -investment gap  -3.4 -3.4 -4.5 -3.2 -1.6 
External sector       
Current account balance  -3.0  -3.0  -4.2  -3.3  -1.3  
Net merchandise trade  0.7  0.0  -0.3  1.0  2.5  
Merchandise exports  9.8  9.8  9.1  10.5  10.3  
Merchandise imports  9.1  9.8  9.4  9.6  7.8  
Services balance  -1.6  -1.9  -2.0  -2.0  -1.7  
Capital account  0.01  0.01  0.01  0.03  0.02  
Financial accounta -3.0  -2.9  -4.1  -3.1  -0.9  
Direct investment, neta -3.3  -2.2  -2.9  -3.4  -4.0  
Balance  of paymentsa -0.8  0.2  -0.4  -0.1  -0.5  
Terms of trade (% change)  -5.8  -2.0  -3.4  -11.0  -10.0  
Merchandise exportsb (% change)  -5.2  -0.3  -7.2  -15.2  -3.0  
Merchandise importsb (% change)  -1.3  7.3  -4.3  -25.3  -19.1  
Service export sb (% change)  5.0  -2.1  5.1  -15.5  -1.4  
Service importsb (% change)  6.5  6.8  4.4  -19.7  -9.8  
Gross official reservesc (US$ billion, end -period)  378.6  375.8  374.1  368.7  372.2  
in months of imports of goods and services  14.9  13.8  14.1  18.2  22.0 
Gross external debt (US$ billion)  327.7  321.6  352.8  334.7  323.7  
% of GDP  13.3  13.0  14.4  18.6  17.9  
.. Not available.  
a Net lending (+) / net borrowing ( -). 
b Calculations based on flows data denominated in US$.  
c Includes repo lines of credi t and foreign currency loans positions.  
Source : Instituto Brasileiro de Geografia e Estatística (IBGE) online information; Central Bank of Brazil online 
information.  
1.6.  According to IMF projections, the Brazilian economy would enter a gradual recovery in 2017 , 
but growth would remain weak for a prolonged period. Output is expected to grow by 0.5% WT/TPR/S/358 • Brazil  
 
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  in 2017, 1.5% in 2018 , and 2% in each of the following three years. Inflation is expected to 
decelerate to 6.1% in 2018 and stabilize  at around 5% thereafter. Gross p ublic debt is projected to 
remain on an upward path, increasing from 82.9% of GDP in 2017 to 93.5% of GDP in 2021. The 
current account deficit is expected to stabilize at around 2% of GDP. This scenario is based on the 
assumption that the authorities would  implement planned fiscal consolidation reforms and 
infrastructure concessions in a reasonable time  frame, and that there would be no 
re-intensification of political uncertainty.  
1.7.  The authorities' economic performance projections for 2017 include: 0.5% GDP growth, 4.3% 
inflation, a current account deficit at 1.4% of GDP, and inward FDI at 3.8% of GDP. Real GDP 
growth is projected at 2.5% in 2018 -19, while inflation is expected to ease down to 5% in 2019. 
The Central Bank of Brazil (BCB) also considers that r eforms addressing fiscal imbalances would 
significantly contribute to restoring investor and consumer confidence, thereby supporting 
economic recovery . Maintaining the disinflation momentum and preserving the financial system's 
stability would be other key  elements of an adequate environment for sustainable economic 
growth.  
1.2.2   Monetary and exchange rate policy  
1.8.  Headline and core inflation have been around the upper limit of the tolerance range 
established by the BCB for several years. The Brazilian real's depre ciation and a realignment of 
certain energy prices in 2015 (Section 4.3) contributed to the acceleration  of inflation, but 
second -round inflationary pressures were successfully contained. The BCB maintained an 
appropriately calibrated monetary policy stanc e, raising the overn ight rate (SELIC) from 7.11% 
in January 2013 to 14.15% at end -July 2015 and gradually r educing it from October  2016 
to 11.25% at mid -April 2017. In parallel, the National Monetary Council gradually raised the 
long-term interest rate (TJ LP), a keystone in the provision of earmarked credit (funded with public 
resources), from 5% to 7.5%, mostly in the course of 2015. The TJLP was reduced to 7% in the 
second quarter of 2017. Although differences in the nature and maturity of loans preclude strict 
comparison, on average, earmarked loans earned significantly lower interest rates than credit 
provided by the private sector (Table  1.2). 
1.9.  The Brazilian financial system remained stable during the period under review, although the 
unprecedented reces sion increased delinquency rates, resulting in a cautious credit granting policy 
and low borrower demand. Provisions were prudently strengthened, raising banks' capacity to 
absorb short -term liquidity shocks. Structural liquidity risks remained broadly unc hanged, with 
long-term assets fully supported by sources of stable funding. According to the authorities, Brazil's 
financial system continues to outperform the prudential regulatory requirements, which are closely 
aligned with the Basel III global standard s.  
1.10.   Brazil maintains a floating exchange rate system with no restrictions on currency conversion 
and transfers for current international transactions.6 The BCB has not sought to influence the 
exchange rate, limiting its currency market interventions to con taining excessive short -term 
volatility. During 2013 -15, the Brazilian real depreciated by around 20% in real effective terms, 
moving towards levels more consistent with fundamentals, but it appreciated by around 6% in 
2016.7 Having remained broadly stable  throughout the period under review, at end -2016 Brazil's 
gross international reserves represented some 21% of GDP and 330% of external debt maturing 
within the following  twelve months. The high level of international reserves played a major role in 
provid ing stability to the Brazilian economy.  
1.2.3   Fiscal policy  
1.11.   Brazil's decentralized public administration operates on the basis of framework 
arrangements determining the allocation of taxation powers, expenditure responsibilities and 
transfer mechanisms among the  three levels of government (federal, state and municipal). Fiscal 
management rules, applicable to all levels of government, are mainly set out in the Fiscal 
Responsibility Law.8  
                                                
6 Certain foreign exchange operations remain subject to a financial transaction tax (IOF) of 6.38% 
(Section  4.5.3).  
7 IMF (2016), Brazil: 2016 Article IV Consultation — Press Release; Staff Report; and Statement by the 
Executive Director for Brazil . IMF Country Report No. 16/348.  
8 Supplementary Law No. 101 of 4 May 2000.  WT/TPR/S/358 • Brazil  
 
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  1.12.   At all levels of government, fiscal policy has faced difficulties in respond ing to the severe 
economic downturn. As a result, the federal budget's primary balance registered widening deficits 
during 2013 -16 (Table 1.3). Most sub -federal governments were also unable to maintain fiscal 
discipline, struggling to cope with sharply fal ling revenues and rising mandatory spending (chiefly 
on salaries and pensions).9 In 2016, the primary deficit of the non -financial public sector 
amounted to 2.5% of GDP and the overall deficit was 8.9% of GDP.  
Table 1.3 Public sector fiscal balance, 2012 -16 
(% of GDP, unless otherwise indicated)  
  2012  2013  2014  2015  2016  
A. Central government       
Total revenue  22.0 22.1 21.1 20.8 21.0 
Treasury revenue  16.3 16.4 15.3 15.0 15.3 
Taxes  7.3 7.2 7.0 7.0 7.2 
Income tax (IR)  5.1 5.1 4.9 5.0 5.4 
Tax on industrial products  0.9 0.8 0.9 0.8 0.7 
Financial transaction tax (IOF)  0.6 0.6 0.5 0.6 0.5 
Import tax (II)  0.6 0.7 0.6 0.6 0.5 
Social contributions  6.1 6.3 5.8 5.7 5.9 
Contribution to social security financin g (COFINS)  3.6 3.8 3.4 3.4 3.3 
Other contribution  2.5 2.5 2.4 2.3 2.7 
Other revenue  2.8 2.8 2.5 2.2 2.2 
Fiscal incentives  -0.003  -0.001  -0.0001  -0.0002  -0.003  
Social security revenue  5.7 5.8 5.8 5.8 5.7 
Transfers to states and municipalities  3.6 3.4 3.4 3.4 3.6 
Total net revenue  18.5 18.7 17.7 17.4 17.4 
Total expenditure  16.9 17.3 18.0 19.3 19.8 
Treasury expenditure  10.3 10.6 11.2 12.0 11.7 
Payroll  3.9 3.8 3.8 4.0 4.1 
Other mandatory expenditures  2.1 2.4 2.7 3.8 3.1 
Workers' support fund (FAT)  0.8 0.8 0.9 0.8 0.9 
Economic subsidies  0.2 0.1 0.1 0.9 0.4 
Assistance benefits (LOAS/RMV)  0.6 0.6 0.7 0.7 0.8 
Other current and capital expenditures  0.6 0.8 1.0 1.5 1.0 
Discretionary expenditures  4.3 4.3 4.7 4.2 4.5 
Social security benefit  6.6 6.7 6.8 7.3 8.1 
Sovereign fund of Brazil  0.3 0.0 0.0 0.0 0.0 
Central government primary balancea 1.8 1.4 -0.4 -1.9 -2.5 
Nominal interest  -3.1 -3.5 -4.3 -6.6 -5.1 
Central government overall balance  -1.3 -2.1 -4.7 -8.6 -7.6 
B. General government       
General go vernment primary balance  2.3 1.7 -0.5 -1.8 -2.4 
General government overall balance  -2.7 -3.5 -6.2 -10.6 -8.9 
C. Consolidated public sector       
Consolidated public sector primary balance (including public enterprises)  2.2 1.7 -0.6 -1.9 -2.5 
Consolidate d public sector overall balance (including public enterprises)  -2.3 -3.0 -6.0 -10.2 -8.9 
Memorandum items (end -period):       
Gross general government debt (R$ billion)  2,583.9  2,748.0  3,252.4  3,927.5  4,378.5  
Gross general government debt  53.7 51.5 56.3 65.5 69.9 
Net public debt  32.2 30.5 32.6 35.6 46.2 
Net general government debt  32.8 31.1 33.2 37.9 47.8 
Net BCB debt  -1.2 -1.2 -1.2 -3.1 -2.5 
a Including methodological adjustments and statistical discrepancies.  
Source:  National Treasury of Brazil o nline information and data provided by the authorities.  
1.13.   Despite the loss of investment grade in the last quarter of 2015, Brazil had no major 
difficulties in placing new debt, partly due  to the favourable composition of public debt by 
instrument and credit or. Gross general government debt increased from 53.7% of GDP in 
December 2012 to 69.9% of GDP at end -2016.10 Foreign debt accounted for 5.2% of gross public 
sector debt and 3.6% of GDP in December 2016; it was mainly attributable to the federal 
government (52.5% of gross foreign public debt) and the state governments  (42.8% ). Net public 
debt rose from 32.2% of GDP in December 2012 to 46.2% of GDP in December 2016.  
1.14.   Whereas the benchmark for minimum spending on health by the federal government was 
raised in 2 015, the authorities have been taking steps to correct fiscal imbalances since 
                                                
9 In 2015, more than half of Brazil's 27  federative states breached limits established by the Fiscal 
Responsibility Law. Specifically, 15 states exceeded the maximum limit for personnel expenditures (49% of 
current net revenues) and 2 states ( Rio de Janeiro  and Minas Gerais ) exceeded the alert l imit for debt (180% 
of net current revenues).  
10 Brazil's gross debt statistics do not include PETROBRAS and ELETROBRAS.  WT/TPR/S/358 • Brazil  
 
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  mid-2016.11 In September 2016, a constitutional amendment reduced the share of earmarked 
public spending in budgets at all levels of government with a view to facilitating fiscal  
adjustment.12 In addition, a New Fiscal Regime for the federal government, established in 
December 2016 for a period of 20 years , froze primary spending in real terms.13 Discussions on 
credit relief measures for the state governments and on a social securit y reform are also ongoing.  
1.15.   While these initiatives seek to address the recent aggravation of fiscal imbalances, they 
would not tackle long -standing flaws in Brazil's tax system, which continue to discourag e 
entrepreneurship. It is reported that with its m ultiplicity of taxes, tax regimes , and sub -national 
jurisdictions, the Brazilian tax system remains overly complex, burdensome and unpredictable 
(notably with respect to the settlement of tax credits and the legality of tax concessions 
granted).14 Consequen tly, Brazil ranked 181st out of 190 economies on the ease of paying taxes in 
the 2017 World Bank Doing Business  survey, with an estimat ed tax compliance time of 
2,038  hours (85 days).15 According to the authorities, reforming the tax system is one of the 
Brazilian Government's priorities; the reform process is expected to begin in 2017.  
1.2.4   Labour market policies  
1.16.   In 2016, the authorities revised their approach to minimum wage indexation, abandoning a 
formula based on recent rates of real GDP growth and inflation , which was not prescribed in the 
legislation. In addition, a legislative amendment allowing for broader use of outsourced temporary 
labour by enterprises (legal persons) entered into force on 31 March 2017.16 By specifically 
providing for the outsourcing o f both "non -core" and "core" operations, the new law is expected to 
clear up  a matter previously open to interpretation in labour courts, thereby helping to reduce 
workforce informality in Brazil. As an indication, pension contributors represent about 46% of the 
Brazilian working age population, compared with 86% in advanced economies.17  
1.17.   According to a recent study, the Brazilian labour regime would merit a broader reform, 
which should also address: the extensive and complex body of legislation and case law ; the 
propensity to resolve labour matters, both of legal and economic nature, through litigation rather 
than through collective negotiations, mediation, or arbitration; and disincentives to lasting work 
relations and investment in staff training.18 Reducin g the costs and delays associated with the 
large number of labour lawsuits (4.4 million ongoing and 3.9 million new in 2014) would also be 
beneficial for the Brazilian economy's competitiveness.  According to the authorities, a draft bill 
addressing some of  the shortcomings of the Brazilian labour regime is under discussion in the 
Senate.  
1.2.5   Balance of payments  
1.18.   Brazil's current account was in deficit throughout the period under review (Table  1.4). 
Having reached 4.2% of GDP in 2014, the deficit narrowed to some  1.3% of GDP in 2016 as the 
trade -in-goods balance returned to a surplus, driven by the real's depreciation and the declining 
demand for imports. The services and primary income deficits also narrowed from 2015 onward. 
The financial account balance continu ed to register capital inflows, reflecting strong interest by 
foreign investors in equity deals made attractive by the weaker real. Debt liability flows fell 
sharply, especially in 2015, reflecting the hardening of access to credit for PETROBRAS and other 
large corporations. Foreign direct investment fully financed the current account deficit in both 2015 
and 2016.  
                                                
11 Constitutional amendment No. 86 of 17 March 2015.  
12 Constitutional amendment No. 93 of 8 September 2016.  
13 Constitutional amendment N o. 95 of 15 December 2016.  
14 Ricardo de Menezes Barboza, Gilberto Borça Jr., Guilherme Tinoco de Lima Horta, João Marco Braga 
da Cunha, and Felipe Guatimosim Maciel, A indústria, o PSI, o BNDES e algumas propostas (2017), BNDES 
discussion paper 114.  
15 Data in Doing Business 2017  are current as of 1 June 2016. For Brazil's country profile, as well as 
notes on the methodology and its limitations, see: 
http://www.doingbusiness.org/~/media/wbg/doingbusiness/documents/profiles/country/bra.pdf . 
16 Law No. 13,429 of 31 March 2017.  
17 IMF, Brazil Selected issues  (2016), IMF Country Report No. 16/349.  
18 Ricardo de Menezes Barboza, Gilberto Borça Jr., Guilherme Tino co de Lima Horta, João Marco Braga 
da Cunha, and Felipe Guatimosim Maciel, A indústria, o PSI, o BNDES e algumas propostas (2017), BNDES 
discussion paper 114.  WT/TPR/S/358 • Brazil  
 
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  Table 1.4 Balance of payments, 2012 -16 
(US$ million)  
  2012  2013  2014  2015  2016  
Current account  -74,218.4  -74,838.9  -104,181.3  -59,434.3  -23,530.7  
Goods and services balance  -22,748.5  -45,983.5  -54,736.0  -19,248.5  14,589.1  
Balance on goods (f.o.b.)  17,419.6  388.6  -6,629.2  17,669.9  45,037.0  
Exports  242,283.2  241,577.3  224,097.8  190,092.1  184,452.9  
Imports  224,863.6  241,188.7  230,727.0  172,422.2  139,415.9  
Services and primary income (net)  -94,475.6  -78,910.6  -100,277.1  -79,827.9  -71,528.2  
Services balance  -40,168.1  -46,372.1  -48,106.8  -36,918.4  -30,447.9  
Credit  38,816.3  38,010.5  39,965.3  33,777.5  33,300.3  
Debit 78,984.4  84,382.7  88,072.1  70,695.9  63,748.2  
Primary income balance  -54,307.5  -32,538.5  -52,170.3  -42,909.5  -41,080.3  
Credit  8,618.2  12,129.9  12,849.3  11,930.7  11,527.5  
Debit 62,92 5.7  44,668.3  65,019.6  54,840.2  52,607.8  
Secondary income balance  2,837.6  3,683.1  2,725.0  2,723.8  2,960.5  
Capital account  207.9  322.3  231.5  461.2  273.8  
Balance on current and capital account  -74,010.5  -74,516.7  -103,949.8  -58,973.1  -23,257.0  
Financial accounta -73,953.8  -72,695.6  -100,598.5  -55,154.8  -16,467.0  
Direct investment  -81,398.9  -54,239.7  -70,855.3  -61,175.3  -71,113.4  
Brazil's direct investment abroad  5,207.6  14,941.8  26,039.7  13,518.4  7,815.1  
Equity capital  4,742.7  16,300.3  25,328.0  14,357.4  8,040.4  
Debt instruments  464.9  -1,358.5  711.6  -839.1  -225.3  
Direct investment in Brazil  86,606.5  69,181.4  96,895.0  74,693.6  78,928.5  
Equity capital  64,065.6  30,835.3  57,918.2  56,640.3  54,020.9  
Debt instruments  22,540.9  38,346.1  38,976.7  18,053.4  24,907.6  
Portfolio investments  -15,825.8  -32,786.5  -38,707.6  -22,269.4  19,216.4  
Net acquisition of financial assets  7,402.7  8,981.1  2,819.7  -3,567.9  -598.6  
Equity and investment fund share s 6,941.8  6,219.2  2,144.3  -118.0  -693.0  
Debt securities  460.8  2,761.9  675.4  -3,450.0  94.5  
Net incurrence of liabilities  23,228.5  41,767.6  41,527.3  18,701.5  -19,815.0  
Equity and investment fund shares  5,601.8  11,636.3  11,773.0  9,811.3  10,585.9  
Debt securities  17,626.7  30,131.3  29,754.3  8,890.2  -30,400.9  
Financial derivatives  -24.6  -110.3  1,568.2  3,449.7  -968.9  
Net acquisition of financial assets  -301.1  -497.2  -7,614.1  -20,659.1  -13,873.5  
Net incurrence of liabilities  -276.4  -386.8  -9,182.2  -24,108.7  -12,904.6  
Other investments  4,396.1  20,367.4  -3,436.4  23,271.5  27,161.5  
Net acquisition of financial assets  23,840.5  39,413.3  50,666.5  43,970.0  33,440.1  
Net incurrence of liabilities  19,444.4  19,045.9  54,102.9  20,698.5  6,278.6  
Reserve assets  18,899.6  -5,926.5  10,832.7  1,568.8  9,237.4  
Errors and omissions  56.7  1,821.0  3,351.3  3,818.4  6,790.0  
a Net lending (+) / net borrowing ( -). 
Source:  Central Bank of Brazil online information . 
1.3  Developme nts in Trade and Investment  
1.3.1   Trends and patterns in merchandise and services trade  
1.3.1.1   Merchandise trade  
1.19.   Brazil's total merchandise trade grew by 3.5% (year -on-year) in 2013 and contracted at an 
annual average rate of 12.3% during 2014 -16. Exports of goods decl ined faster than imports 
between 2012 and  2014, mainly on account of falling commodity prices. The real's depreciation 
and Brazil's economic downturn translated into a sharper fall in demand for imports in 2015 and a 
rebound of the merchandise trade balanc e into a surplus. Total services trade expanded at an 
annual average rate of 4.3% during 2013 -14 and shrank at an annual average rate of 12.8% over 
2015-16. 
1.20.   In 2016, Brazilian merchandise exports stood at 76.4% of their 2012 value. The contraction 
was main ly driven by exports of mining products, particularly fuels and iron ores which were 
adversely affected by world price developments. Agriculture exports continued to dominate, 
increasing their share in total exports from 35.6% in 2012 to 41.5% in 2016. The  share of 
manufactures increased from 33.8% to 37.9% of Brazil's exports between 2012 and 2016, largely 
on account of machinery and transport equipment, and iron and steel exports (Chart  1.1 and 
Table  A1.1).  WT/TPR/S/358 • Brazil  
 
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  Chart 1.1 Product composition of merchandise trade, 2012 and 2016  
Chart 1.1  Product composition of merchandise trade, 2012 and 2016
2012 2016
Exports (f.o.b.)
Machinery
6.6%
Manufactures
33.8%
Total:  US$242.6 billion Total:  US$185.2 billion
Imports (f.o.b.)
Chemicals
18.9%Transport equipment
12.8%
Manufactures
73.1%Electrical machines
13.1%
Non-electrical 
machinery 
12.5%Electrical machines  
13.3%Soybeans
10.4%
Other semi -manuf.  
5.9%
Chemicals
24.7%Manufactures
77.1%
Total:  US$223.1 billion Total:  US$137.6 billionManufactures
37.9%
Iron & steel
4.4%
Mining
17.7% 
Fuels
10.9%
Other consumer 
goods  9.2%Iron ore & 
concentrates  12.8%Other mining
3.4%Machinery
6.3%
Other semi -manuf.  
7.2% 
Iron ore &
concentrates 7.2%Transport 
equipment
11.6%
Mining
27.0%
Source :  UNSD, Comtrade database (SITC Rev.3).Other consumer
goods  8.5%Consumer goods  2.5%
Other mining
4.3%Other semi -manuf.  
5.0%Consumer goods  2.2%
Other semi -manuf.
7.3%Transport
equipment  
9.2%
Agriculture
8.7%Agriculture
5.9%Transport equipment
11.2%Chemicals
6.2%
Chemicals
5.9%
Agriculture
35.6%Agriculture
41.5% Iron & steel
4.6%
Fuels
11.0%Fuels
18.0%
Other mining
3.1%Other mining  
2.9%Non-electrical
machinery  
12.9%Agricultural raw
materials  4.8%Other food
26.3% Fuels
6.3%Other  3.6%
Agricultural raw 
materials  3.8%Other food
24.7%Soybeans
7.1%Other  2.9%
 
Source:  UNSD, Comtrade database (SITC Rev.3).  
1.21.   Merchandise imports grew by 7.4% (year -on-year) in 2013, but shrank to 61.6 % of 
their 2012 value during 2014 -16. The drop was mainly attributab le to weaker demand for fuel 
imports at the height of the Brazilian economy's recession. Notwithstanding some fluctuation, 
demand for manufactures remained strong and they accounted for some 77.1% of Brazil's total 
imports in 2016. The main import categori es were chemicals, machinery and transport equipment. 
The share of agricultural imports also registered a modest increase in 2015 -16 (Table  A1.2).  
1.22.   Bilateral flows between Brazil and most of its major trading partners contracted in nominal 
terms during 2012 -16. The EU remained Brazil's main source of imports throughout 2012 -16, but WT/TPR/S/358 • Brazil  
 
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  was overtaken by China as the main destination for Brazilian exports from 2015 onward 
(Tables  A1.3 and  A1.4). China was Brazil's second most important supplier of merchandise duri ng 
2012-15, but was outpaced by the United States in 2016 (Chart  1.2). During 2012 -16, two -way 
trade flows with the United States intensified, expanding their shares of total exports and imports 
by 1.5 and 2.9 percentage points respectively. The relative w eight of trade with other MERCOSUR 
members declined somewhat, notably on the exports side.  
Chart 1.2 Direction of merchandise trade, 2012 and 2016  
Chart 1.2  Direction of merchandise trade, 2012 and 2016
2012 2016
Exports (f.o.b.)
Asia
31.3%
Total:   US$242.6 billion Total:  US$185.2 billion
Imports (f.o.b.)
Other
4.1%
EU-28
21.4%Middle East
3.3%
United States
14.6%EU-28
22.6%
Argentina
6.6%Other
4.2%
United States
17.5%
Total:   US$223.1 billion Total:   US$137.6 billionAfrica
5.0%
Middle East
2.6%Korea, Rep. of
4.0%Korea, Rep. of  
4.1%United States
11.1%Other Asia
11.0%
United States
12.6%Middle East
5.5%
Source :  UNSD, Comtrade database.Japan
2.6%China
15.3%Other  
4.6%
EU-28
18.0%
Other MERCOSUR
4.1%China
17.0%
Japan
3.5%
Other Asia
8.5%Other MERCOSUR
3.4%EU-28
20.3%Middle East
4.8%
Argentina
7.4%
Other America
10.6%Other
5.5%China
19.0%
Argentina
7.4%Other Asia
12.2%
Africa
6.4%Other Asia   
8.6%Japan
3.3%
Argentina
7.2%Africa
4.2%
Other 
MERCOSUR
1.7%Asia
32.1%Asia
31.5%Asia
33.7%
Other America
9.0%Other America
9.7%Other America
10.8%
Africa
3.3%
Other 
MERCOSUR
2.1%Japan
2.5%
China
17.0%Americas
33.2%Americas
34.0%
Americas
33.3%Americas
35.3%
 
Source:  UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/358 • Brazil  
 
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  1.3.1.2   Services trade  
1.23.   As at the time of its previous Review, Brazil remains a net importer of services. The overall 
deficit widened to US$48.1 billion in 2014 but contracted to US$30.5 billion in 2016 amid the 
sharp economic downturn. The main drivers of the negative balance w ere leasing and travel 
services (Table  A1.5). Most of the expenditures on leasing contracts were attributable to the oil 
and gas industry. During 2012 -15, the deficits in the transport and telecommunications and 
information services segments narrowed consi derably, whereas the deficit  related to charges for 
the use of intellectual property widened somewhat. As at the time of its previous Review, Brazil 
maintained a positive balance in other business services, including architecture and engineering.  
1.24.   Accordin g to data from Brazil's Integrated System of Trade in Foreign Services, Intangible 
Assets and Other Operations (SISCOSERV), which became fully operational in October 2013 
(Section  3.1.1), the main Brazilian services exports were: management and management 
consulting; other professional, technical and management services; auxiliary financial services; 
freight transport by water; and maintenance and repair of fabricated metal products, machinery 
and equipment.19 Brazil's main services imports included: operati onal leasing; freight transport by 
water; licensing on copyright and related rights; and other professional, technical and 
management services.  
1.25.   In 2015, the United States was Brazil's main partner in services trade, accounting for 28.6%  
of Brazil's total imports and 32.5% of  its total exports. The EU, notably the Netherlands,  ranked as 
Brazil's second most important partner , accounting for 26.1% of total imports and 9.4%  of total 
exports . 
1.3.2   Trends and patterns in FDI  
1.26.   During 2012 -16, Brazil continued to attra ct sizable equity inflows,  ranging between 2% 
and 3.3% of GDP, which constituted a factor of strength amid the eroding confidence in the 
domestic policy framework. Inward FDI dropped by 18.5% (year -on-year) in 2013, nearly 
recovered in 2014 -15 and contract ed again in 2016. It significantly outpaced Brazilian investment 
abroad throughout 2012 -16. During that period FDI inflows totalled US$277.6 billion, spread 
across a wide range of economic activities. The main FDI recipients were commerce, oil and gas 
extraction, financial services and transport equipment (Table  1.5). The EU remained the leading 
investor,  with a considerable share attributable to the Netherlands. The United States also 
remained an important source of inward direct investment (Table 1.6).  
Table 1.5 Foreign direct investment (equity) inflows by sector, 2012 -16 
 2012  2013  2014  2015  2016  
Total inflows (US$ million)  60,542.7  49,345.3 56,099.1  57,907.2  53,672.8  
(% of GDP)  2.5 2.0 2.3 3.3 3.0 
 % of total  
Crop, livestock and mineral extraction  10.8 20.2 10.0 14.4 16.2 
Oil and gas extraction  6.1 14.5 3.8 7.9 7.9 
Metallic mineral extraction  2.7 1.7 3.8 2.6 4.6 
Mining support service activities  1.0 2.5 1.4 2.4 1.3 
Crop, livestock, and related servi ces 0.6 1.2 0.6 0.9 1.7 
Non-metallic mineral extraction  0.2 0.1 0.1 0.1 0.5 
Forestry production  0.1 0.3 0.3 0.4 0.1 
Industry  36.7 30.8 30.2 36.2 37.5 
Basic metallurgy  8.8 3.0 4.3 1.5 2.7 
Foodstuff  8.4 3.0 2.8 4.0 2.4 
Chemical products  3.1 4.1 3.9 4.2 4.0 
Pharmaceuticals  2.6 2.2 1.5 1.0 1.5 
Motor vehicles, trailers, semi -trailers, and related parts  2.1 3.8 5.2 7.8 12.2 
Machinery and equipment  1.6 1.8 1.5 1.9 2.9 
Electrical machines, devices, and apparatuses  1.3 1.1 1.8 1.8 2.0 
Pulp, paper, and pap er products  1.2 1.1 0.9 1.2 0.6 
Computer equipment, electronic, and optical products  1.2 2.9 2.7 1.9 1.0 
Plastic and rubber products  1.1 1.6 1.2 1.5 0.8 
Non-metallic mineral products  1.0 0.5 0.4 1.1 2.3 
Other manufacturing  1.0 0.4 0.4 0.6 0.5 
                                                
19 SISCOSERV data are not directly comparable with data obtained from the Services Account of the 
Balance of Payments, due to  the use of different classifications and statistics collection methods. SISCOSERV 
trade in services statistics can be viewed at: http://www.mdic.gov.br/comercio -servicos/estatisticas -do-
comercio -exterior -de-servicos  [23 April 2017].  WT/TPR/S/358 • Brazil  
 
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   2012  2013  2014  2015  2016  
Beverage s 0.8 1.2 0.0 0.2 0.7 
Coke, oil derivatives, and biofuels  0.6 1.8 1.1 0.3 0.2 
Metal products, except machinery and equipment  0.6 0.5 0.7 1.4 1.3 
Other transportation equipment  0.4 1.0 0.4 0.7 1.5 
Wood products, except furniture  0.3 0.2 0.1 0.2 0.2 
Textile products  0.1 0.0 0.2 0.3 0.1 
Publishing activities  0.1 0.1 0.5 0.0 0.1 
Repair of computers and personal and household goods  0.0 0.1 0.0 0.0 0.2 
Tobacco products  0.0 0.0 0.1 3.8 0.1 
Other industries  0.4 0.3 0.4 0.6 0.2 
Services  51.9 48.4 59.5 49.1 45.9 
Commerce, except vehicles  9.4 12.6 10.1 9.4 10.6 
Financial and auxiliary services  8.1 6.0 8.5 2.4 3.4 
Insurance, reinsurance, complementary social security and 
health assistance  7.7 3.9 3.6 1.1 0.9 
Real estate activities  6.0 4.1 2.9 3.7 3.6 
Electricity and gas  3.4 3.1 4.5 6.8 5.5 
Office services and other services rendered to corporations  2.0 0.6 0.2 0.6 2.0 
Transportation  1.8 4.3 2.6 1.1 1.4 
Buildings and specialized construction activities  1.6 1.5 1.5 1.1 0.9 
Nonfinancial holdings  1.3 1.8 1.5 1.2 1.5 
Architectural and engineering services  1.2 1.0 0.8 0.8 0.5 
Information technology services  1.2 1.2 2.1 1.7 1.0 
Infrastructure works  1.1 1.3 2.0 1.2 0.8 
Non real estate lease and intangible assets  1.1 1.3 2.6 0.7 1.1 
Storage and transportati on auxiliary activities  1.0 0.8 0.8 1.4 2.9 
Mail services  0.9 0.1 0.1 0.0 0.0 
Telecommunications  0.6 0.7 8.8 7.9 1.8 
Headquarter consulting and management activities  0.6 0.7 0.4 0.6 1.2 
Advertising and market research  0.5 0.2 0.2 1.0 1.0 
Commerce and maintenance of vehicles  0.2 0.6 0.7 1.0 1.1 
Food and beverage service activities  0.2 0.2 0.2 0.1 0.4 
Lodging  0.1 0.1 0.3 0.6 0.5 
Travel agencies and tour operators  0.1 0.1 0.0 0.4 0.1 
Education  0.1 0.1 1.9 0.1 0.2 
Scientific research and development  0.0 0.0 0.1 0.1 0.1 
Auxiliary radio and television activities  0.0 0.1 0.0 0.2 0.1 
Collection, treatment and distribution of water  0.0 0.0 0.0 0.0 0.3 
Other services  1.6 1.9 2.9 3.7 3.0 
Acquisition and sale of property  0.6 0.5 0.4 0.4 0.4 
Source:  WTO ca lculations, based on data provided by the authorities.  
Table 1.6 Foreign direct investment (equity) inflows by trading partner, 2012 -16 
 2012  2013  2014  2015  2016  
Total inflows (US$ million)  60,542.7  49,345.3  56,099.1  57,907.2  53,672.8  
(% of GDP)  2.5 2.0 2.3 3.3 3.0 
 % of total  
Netherlands  20.2 21.3 15.7 20.0 19.6 
Luxembourg  9.9 10.3 11.9 11.4 13.8 
United States  20.3 18.3 15.3 11.5 12.2 
United Kingdom  3.3 2.4 3.1 2.8 6.7 
Spain  4.2 4.6 10.6 11.3 6.5 
Italy 1.6 1.8 1.5 3.0 5.3 
France  3.6 3.0 5.2 4.9 5.2 
Norway  1.5 0.8 1.0 4.2 4.1 
Germany  1.4 2.0 2.8 6.0 3.4 
British Virgin Islands  1.4 0.5 1.4 1.3 3.1 
Japan  2.4 5.1 6.7 5.0 2.6 
Switzerland  7.2 4.7 3.5 1.9 1.8 
Chile 3.3 6.0 2.3 1.8 1.6 
China  0.3 0.2 1.5 0.4 1.6 
Mexico  0.6 1.1 0.2 1.0 1.5 
Belgium  1.1 1.0 0.6 1.7 1.1 
Ireland  0.7 0.3 0.2 0.6 1.1 
Canada  3.2 2.5 1.6 1.7 1.0 
Korea, Rep. of  1.4 1.1 0.7 0.5 1.0 
Cayman Islands  1.0 0.4 1.0 0.9 0.7 
Sweden  0.8 0.8 1.2 0.7 0.7 
Portugal  0.9 1.2 5.6 0.7 0.5 
Uruguay  0.9 0.3 0.3 0.5 0.5 
Bermuda  0.2 0.3 0.2 0.4 0.5 
Hong Kong, China  0.8 0.3 0.8 1.0 0.4 WT/TPR/S/358 • Brazil  
 
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   2012  2013  2014  2015  2016  
Singapore  1.7 0.5 0.4 0.5 0.4 
Cyprus  0.2 0.4 0.0 0.0 0.4 
Denmark  0.8 0.7 0.5 0.6 0.3 
Australia  0.9 0.7 0.6 0.3 0.2 
Bahamas  0.2 1.1 0.3 0.3 0.2 
Peru 0.2 0.0 0.2 0.3 0.2 
Austria  0.2 0.2 0.5 0.1 0.2 
Argentina  0.4 0.2 0.1 0.1 0.2 
Panama  0.4 0.6 0.4 0.5 0.1 
Finland  0.0 0.1 0.1 0.3 0.1 
Colombia  0.3 0.1 0.2 0.2 0.1 
New Zealand  0.0 1.5 0.0 0.0 0.0 
Hungary  0.1 0.0 0.0 0.0 0.0 
Other trading partners  2.4 3.4 1.5 1.6 1.0 
Source:  WTO calculations based on data provided by the authorities.  
1.27.   During 2012 -15, Brazilian equity investment overseas increased in nominal terms but did 
not exceed 0.5% of GDP. Outward FDI flows targeted a variety of economic activities, the m ain 
recipients being telecommunications, financial, and electricity and gas services (Table 1.7). The EU 
remained Brazil's main outward FDI destination, followed by the United States (Table  1.8).  
Table 1.7 Foreign direct investment (equity) outflows by sector, 2012 -16 
 2012  2013  2014  2015  2016  
Total outflows (US$ million)  7,707.0  7,697.5  8,878.7  8,631.1  8,788.8  
(% of GDP)  0.3 0.3 0.4 0.5 0.5 
 % of total  
Crop, livestock and mineral extraction  10.4 1.9 4.7 12.5 6.2 
Metallic mineral extraction  8.1 1.3 2.1 11.0 5.7 
Oil and gas extraction  1.5 0.1 2.3 1.1 0.1 
Forestry production  0.0 0.1 0.1 0.2 0.0 
Mining support service activities  0.0 0.2 0.0 0.1 0.0 
Non-metallic mineral extraction  0.0 0.0 0.1 0.0 0.0 
Others 0.7 0.2 0.1 0.1 0.4 
Industry  9.9 30.4 9.3 21.4 17.7 
Chemical products  1.9 8.7 2.2 0.5 13.7 
Plastic and rubber products  1.6 0.1 0.1 0.1 0.0 
Motor vehicles, trailers, semi -trailers, and related parts  1.5 1.2 0.1 1.7 0.1 
Foodstuff  1.5 9.2 0.6 12.0 0.7 
Machinery and equipment  1.3 0.5 0.5 0.0 0.1 
Pulp, paper, and paper products  0.5 0.4 0.0 1.0 0.2 
Publishing activities  0.4 0.4 2.3 0.0 0.1 
Other manufacturing  0.3 0.0 0.0 0.8 0.4 
Beverages  0.2 7.5 0.4 0.1 0.1 
Coke, oil derivatives, and biofuels  0.2 0.4 0.0 0.0 0.0 
Textile products  0.2 0.1 0.3 0.1 0.0 
Electrical machines, devices and apparatuses  0.2 0.2 0.2 0.0 0.1 
Computer equipment, electronic, and optical products  0.1 0.5 0.0 0.2 0.0 
Basic metallurgy  0.0 0.0 0.2 0.7 1.5 
Metal products, except machinery, and equipment  0.0 0.4 0.2 0.3 0.0 
Non-metallic mineral products  0.0 0.3 0.0 3.7 0.0 
Pharmaceuticals  0.0 0.1 2.0 0.3 0.5 
Other industries  0.1 0.3 0.2 0.1 0.0 
Services  77.0 65.9 84.7 65.2 17.7 
Electricity and gas  25.3 5.0 3.4 2.4 75.7 
Real e state activities  14.5 8.5 5.4 4.4 1.5 
Office services and other services rendered to 
corporations  5.6 0.1 0.1 0.1 1.4 
Buildings and specialized construction activities  4.4 3.3 2.8 0.6 3.3 
Financial and auxiliary services  3.1 16.3 20.7 2.5 0.6 
Storage a nd transportation auxiliary activities  2.4 8.1 0.7 0.8 57.8 
Commerce, except vehicles  2.3 9.4 9.9 6.3 0.9 
Telecommunications  2.3 1.9 29.0 29.7 1.8 
Infrastructure works  2.1 2.7 0.2 9.9 0.3 
Nonfinancial holdings  0.8 1.4 1.4 1.2 0.3 
Information technolog y services  0.7 0.9 4.1 1.7 0.6 
Architectural and engineering services  0.3 1.0 0.2 0.1 0.1 
Non real estate lease and intangible assets  0.2 1.2 3.1 2.0 0.0 
Insurance, reinsurance, complementary social security, 
and health assistance  0.1 3.1 0.6 0.4 0.3 WT/TPR/S/358 • Brazil  
 
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   2012  2013  2014  2015  2016  
Transportation  0.1 0.3 0.0 0.4 1.1 
Commerce and maintenance of vehicles  0.0 0.1 0.0 0.7 0.8 
Other services  12.7 2.8 3.2 2.1 0.0 
Acquisition and sale of property  2.6 1.8 1.3 0.9 0.4 
Source:  WTO calculations based on data provided by the authorities.  
Table 1.8 Foreign direct investment (equity) outflows by trading partner, 2012 -16 
 2012  2013  2014  2015  2016  
Total outflows (US$ million)  7,707.0  7,697.5  8,878.7  8,631.1  8,788.8  
(% of GDP)  0.3 0.3 0.4 0.5 0.5 
 % of total  
United Kingdom  4.4 4.3 0.4 1.7 57.1 
Luxembourg  9.9 2.3 4.8 2.5 13.6 
United States  16.0 38.7 18.4 11.0 12.8 
Netherlands  41.4 13.9 23.1 17.7 4.4 
Spain  6.7 9.4 6.2 11.8 2.8 
Uruguay  0.6 5.3 3.0 0.4 2.2 
France  0.4 0.4 0.4 32.4 1.9 
British Vir gin Islands  0.8 0.4 0.5 0.4 0.7 
Australia  0.0 3.2 0.2 0.3 0.7 
Bermuda  0.1 0.0 0.9 0.7 0.5 
Japan  6.7 1.9 2.4 12.1 0.4 
Canada  1.8 0.3 1.5 1.1 0.4 
Italy 1.5 0.3 0.6 0.3 0.4 
Germany  0.9 1.7 1.2 0.3 0.4 
Cayman Islands  1.1 0.1 0.5 0.8 0.2 
Switzerland  1.4 3.8 0.6 0.7 0.2 
Chile 0.1 0.7 0.0 0.3 0.2 
Bahamas  1.3 0.2 0.1 0.2 0.2 
Portugal  0.8 2.2 30.2 0.6 0.1 
Panama  0.2 0.1 0.2 0.1 0.1 
Belgium  0.0 0.0 0.9 0.0 0.1 
Korea, Rep. of  0.0 0.7 0.0 1.4 0.0 
Argentina  0.4 2.1 0.6 0.5 0.0 
Ireland  0.0 0.1 0.0 0.5 0.0 
Norway  1.3 0.0 1.6 0.1 0.0 
Denmark  0.0 0.0 0.0 0.1 0.0 
Mexico  0.8 0.1 0.0 0.0 0.0 
Hong Kong, China  0.1 0.0 0.0 0.0 0.0 
Austria  0.3 0.0 0.2 0.0 0.0 
Sweden  0.1 0.3 0.1 0.0 0.0 
Other  trading partners  0.6 7.3 1.1 2.0 0.8 
Source:  WTO calculations base d on data provided by the authoritie s.WT/TPR/S/358 • Brazil  
 
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  2  TRADE AND INVESTMENT  REGIMES  
2.1.  Since its last TPR in 2013, Brazil undertook several constitutional amendments including one 
related to curbing public spending growth. The institutional framework for trade policy formula tion 
remained broadly unchanged except for the transfer of the Executive Secretariat of the Foreign 
Trade Board (CAMEX) from the Ministry of Industry, Foreign Trade and Services to the Ministry of 
Foreign Affairs. Brazil's stated trade and trade -related po licy objectives have been integration into 
global value chains and raising the competitiveness of domestic products; its longstanding 
programmes aimed at fostering technological development, shielding certain domestic producers 
from external competition, a ttracting investment, and promoting and diversifying exports remain 
relatively unchanged.  
2.2.  Brazil remains committed to, and is an active participant in, the multilateral trading system. 
During the review period it improved its WTO commitments by ratifying t he Trade Facilitation 
Agreement (TFA) and depositing its instrument of acceptance of the Fifth Protocol on Financial 
Services; it now also grants preferential treatment to services and service suppliers from least 
developed countries (LDCs). At the same ti me, it continues to focus on strengthening regional 
economic integration through the Southern Common Market (MERCOSUR) and Latin American 
Integration Association (LAIA) RTAs with an emphasis on negotiating agreements with trading 
partners outside the regio n; three agreements entered into force (Bolivarian Republic of 
Venezuela, Guyana/Saint Kitts and Nevis, and Southern African Customs Union), four were 
concluded with their entry in force pending (Egypt, Colombia, Pale stine, Peru), and two 
(European  Union, Mexico) are still being negotiated. During the review period, Brazil was directly 
involved in seven WTO disputes, five as a complainant and two as a respondent.  
2.3.  Brazil remains open to and encourages inward foreign direct investment (FDI) which is 
prevalen t across the economy despite foreign ownership prohibitions (certain postal services and 
nuclear energy) or limitations in certain sectors (e.g. air transport, financial institutions, health 
services, rural land acquisition, broadcasting and publishing med ia, fishing, mining and 
hydrocarbons exploration). During the review period, FDI access to certain healthcare services was 
improved. Legally registered domestic and foreign companies compete on an equal footing when 
bidding on contracts or seeking tax and non-tax incentives. To address the legal loopholes existing 
in bilateral investment protection treaties, a new model of investment agreements built upon 
UNCTAD and OECD guidelines was used to negotiate and sign a series of treaties whose ratification 
is under way.  
2.1  General Constitutional and Institutional Framework  
2.4.  The 1988 Constitution of the Republic remains the fundamental law of the State. During the 
review period, 23 new amendments to the Constitution were promulgated, thus bringing to 95  the 
number of  total amendments since its entry in force.1 On 16 December 2016, the National 
Congress promulgated a constitutional reform to curb public spending growth for the next 20 years 
(Section 1.2.3).  
2.5.   The Federative Republic of Brazil is composed of the Union, the states, the municipalities, 
and the Federal District. The Government comprises the executive, legislative, and judiciary 
branches.2 The President, assisted by the appointed Cabinet of Ministers, exercises executive 
power. Presidential terms are four ye ars, and re -election is possible once. Presidential, 
congressional and state elections are held every four years; the next elections are due in 
October  2018.3 The judiciary is composed of the Supreme Federal Court, the Superior Court of 
Justice, the federa l regional courts and federal judges, and other special courts and judges.  
                                                
1 These amendments, inter alia , involved: copyrights of Brazilian authors and/or works generally 
interpreted by Brazilian artists; the delivery of r esources by the Union to the Municipal Participation Fund; the 
treatment of science, technology and innovation activities; the mandatory execution of the budgetary 
programming on tax collection relating to the movement of goods to another State; the extens ion of the period 
for allocating minimum percentages of the resources destined for irrigation in the Central -West and Northeast 
Regions; and issues relating to the Superior Labo ur Court. Presidência da República online information. Viewed 
at: https://www.planalto.gov.br/ccivil_03/Constituicao/Emendas/Emc/quadro_emc.htm .  
2 The bicameral national Congress consists of: an 81 -seat Senate (the upper house) with 
represe ntatives of the 26 states, plus the Federal District of Brasília; and, a 513-member directly elected 
Chamber of Deputies (the lower house). Each state , as well as  the district of Brasília , has its own legislature.  
3 The last elected President was impeached  by Congress on 31 August 2016 and subsequently replaced.  WT/TPR/S/358 • Brazil  
 
- 26 - 
 
  2.6.  Legislative bodies at the federal, state, and municipal levels are in charge of drafting and 
issuing specific legislation as stipulated by the Constitution. Legislation for matters  such as 
monetary policy, foreign trade, telecommunications, maritime and air transport, insurance, and 
utilities, is dealt with by the National Congress with the sanction/approval of the President of the 
Republic; in addition, the Congress has responsibil ity for legislating on all matters within the 
competence of the Union, including approving international treaties by legislative decree prior to 
their promulgation by the President of the Republic (ordinary law or constitutional amendments). 
Legislation on  tax, 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 wherever pertinent.4 The leg islative process includes the 
preparation and enactment of ordinary, supplementary, and delegated laws, as well as 
amendments to the Constitution. Due to the bicameral structure of the Congress, all laws and 
amendments proposal has to pass through the same  process of analysis and voting in both houses 
and, if approved, the proposal is sent to the President of the Republic for sanction, publication, and 
entry into force. Amendments to the Constitution are an exception, as they are promulgated 
directly after congressional approval. Legislative decrees are administrative in nature and require a 
simple majority in Congress.  
2.7.  The President may resort to provisional measures on issues considered to be of particular 
importance and urgency, under the provisions of A rticle 62 of the Constitution. Provisional 
measures become effective upon publication, and should be analysed by Congress upon enactment 
and voted on within a timeframe of 60 days which may be extended once for an identical period of 
time; since 17 May 201 3, 153 such measures have been adopted.5 In the case of tax issues, 
provisional measures passed before the end of the fiscal year may only be applied to the following 
year's budget, except for customs duties on imports, export taxes, the tax on industrial products 
(IPI) and the financial transactions tax (IOF), or extraordinary taxes introduced in case of war 
(Sections  3.1.4, 3.3.1, and 4.5.3.1).  
2.8.  International treaties and conventions must be approved by the National Congress to enter 
into force domestical ly. Upon enactment, through a legislative decree and a Presidential decree, 
international treaties have the same legal status as ordinary laws; nevertheless, the Supreme 
Federal Court has the power to deem them incompatible with the Federal Constitution an d hence 
revoke them, but the authorities indicated that there have been no such cases so far.  
2.2  Structure of Trade Policy Formulation  
2.2.1   Executive branches of government  
2.9.  The Foreign Trade Board (CAMEX) remains in charge of the formulation, implementation and 
coordination of policies and activities relating to foreign trade in goods and services, including 
tourism, with a view to promoting foreign trade, investment and the country's international 
competitiveness.6 As from mid -2016, it has been part of the Presid ency of the Republic and its 
main decision body is the Council of CAMEX, which is chaired by the Chief of Staff of the 
Presidency of the Republic and consists of the Ministers of Foreign Affairs, of Finance, of 
Agriculture, Livestock and Food Supply, of In dustry, Foreign Trade and Services, and of Planning, 
Development and Management, and the Executive Secretary of the Secretariat of the Programme 
of Investment Partnerships of the Presidency of the Republic.7 As of 5 August 2016, the Executive 
Secretariat o f CAMEX was transferred from the Ministry of Industry, Foreign Trade and Services to 
the Ministry of Foreign Affairs which represents Brazil in the WTO and assists CAMEX in regional 
integration and trade matters.8 The authorities indicated that together wi th the transfer of the 
                                                
4 Articles 22, 24 and 30 of the Federal Constitution; and Federal Constitution, Title IV (Chapter I, 
Section II).  
5 Portal da Legislação online information. Viewed at: http://www4.planalto.gov.br/legislacao/portal -
legis/legislacao -1/medidas -provisorias .  
6 CAMEX, inter alia , approves anti -dumping duties, changes tariffs and has an active role in the 
negotiations of investment agreements. Decree No. 4,732 of 10 June 2003; Decree No. 8,807 of 12 July 2016; 
and Decree No. 8,906 of 21 November 2016.  
7 Law No. 13,341 of 29 September 2016. CAMEX online information. Viewed at: 
http://www.camex.itamaraty.gov.br/ .  
8 Decree No. 8,823 of 28 July 2016. Viewed at: 
http://www.internationaltradecomplianceupdate.com/2016/08/24/brazil -executive -secretariat -of-camex -is-
incorporated -into-the-itamaraty/ .  WT/TPR/S/358 • Brazil  
 
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  chairmanship of the Council of CAMEX to the Presidency this shift is aimed at strengthening the 
coordination of government bodies responsible for trade and investment policies; furthermore, the 
Executive Secretariat of CAMEX was plac ed within a ministry with a traditional coordination and 
chief negotiator role for trade.  
2.10.   The Ministry of Industry, Foreign Trade and Services (MDIC) implements trade policy in line 
with CAMEX guidelines through its Secretariat of Foreign Trade (SECEX). SE CEX was last 
restructured on 29 November 2016 (Decree No. 8,917) and it now consists of five departments: 
Foreign Trade Operations (DECEX); Trade Remedies (DECOM); International Trade Negotiations 
(DEINT); Statistics and Export Support (DEAEX); and Foreign  Trade and Competitiveness 
(DECOE).9 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 Priv ate Sector Advisory Council (CONEX).  
2.2.2   Advisory, planning and other bodies  
2.11.   The main policy advisory bodies remain the public sector's Institute for Applied Economic 
Research (IPEA) under the Ministry of Planning, Development and Management (MPOG),  and the 
Brazilian Industrial Development Agency (ABDI) under the MDIC.10 IPEA provides technical and 
institutional support to government actions for the formulation and revision of public policies and 
development programmes in Brazil; the ABDI's sectoral work covers  capital goods, industrial 
intelligence, mining, pharmaceuticals, innovation, oil and gas, textiles and clothing, and 
telecommunication. Furthermore, non -governmental bodies such as the National Confederation of 
Industry (CNI) and t he Centre for  Global Tra de and Investment (CGTI) of the Getúlio Vargas 
Foundation (FGV) remain active in research and consultative work relating to trade policy 
formulation. In 2016, the CNI launched a priorities agenda promoting the integration of Brazilian 
companies into the wo rld market.11 Since May 2014, the CGTI has been a member of the WTO 
Chairs Programme and hosts workshops on trade dispute settlement; recently it also undertook 
joint research activities with IPEA and private sector chambers.12  
2.3  Trade Policy Objectives  
2.12.   According to the authorities, during the review period trade policy was revised to overcome 
economic challenges and to meet its objectives of industrial development, production 
diversification, technological upgrading, raising competitiveness of domestic produ cts, integration 
into global value chains and international markets, and intensifying and diversifying exports. At the 
same time, notwithstanding regulatory and institutional changes driven, inter alia , by public 
expenditure tightening due to the recent ec onomic slowdown, Brazil's longstanding trade and 
trade -related policy objectives of shielding certain domestic producers from external competition 
and attracting investment remained broadly unchanged (Section 4). The policy tools for attaining 
these object ives in certain activities remain to some extent characterized by persisting "infant 
industry" protection and tariff jumping principles. They comprise border measures coupled with 
complex and possibly distortive tax and non -tax incentives, inter alia , invo lving production 
step-related local content requirements, administered interest rate or subsidized credit and other 
targeted subsidies often leading to cross -subsidization elements affecting the economy and its 
prospects (Section  4).13 As a result, Brazil r emains an inward -oriented and relatively closed 
economy – as reflected by its low international trade penetration/openness (Section  1.1), 
favouring production step -related local content over competitiveness -inducing international market 
integration and the reby impeding integration into global value chains by raising the costs of 
imported inputs. A small number of companies are responsible for the overwhelming share of the 
country's exports, which contain a particularly high share of domestic value added (93 %).14 By 
                                                
9 MDIC online information. Viewed at: http://www.mdic.gov .br/institucional/organograma .  
10 IPEA online information. Viewed at: http://agencia.ipea.gov.br/ ; and ABDI online information. Viewed 
at: http://www.ab di.com.br/Paginas/default.aspx .  
11 CNI online information. Viewed at: http://www.portaldaindustria.com.br/cni/ .  
12 CCGI online information. Viewed at: http://ccgi. fgv.br/ . 
13 Tariff jumping refers to the establishment of a production facility within a foreign country, through 
FDI or licensing, in order to avoid a tariff. The authorities consider that the determination of whether tax and 
non-tax incentives are "disto rtive" needs to be made on a case -by-case basis, and only after having assessed 
specific data on a given industry.  
14 The top 1% of Brazilian exporters generates 59% of total exports, while the top 25% of them account 
for 98% of export revenues. Otaviano, C ., C. Fleischhaker, and P. Schellekens (2015), The curious case of WT/TPR/S/358 • Brazil  
 
- 28 - 
 
  protecting the domestic market, Brazil reduces the incentives to raising efficiency and quality or 
product differentiation while preventing domestic producers from sourcing from the lowest cost or 
better quality input suppliers. As a result, Brazil ian manufactured products continue to lack 
competitiveness and their world market shares in most activities remain small, thus keeping Brazil 
as a marginal player in international trade of industrial goods.15  
2.13.   Brazil continued to focus on strengthening regi onal economic integration through 
MERCOSUR and LAIA, which are now proceeding with negotiations with trading partners outside 
the region (Section 2.6.2.1.1). Brazil's trade strategy targets "productive" integration with 
Latin America and RTAs with major tr ading partners.16 Action was taken to strengthen trade 
relations with traditional partners and open new markets for Brazilian products through the 
negotiation and conclusion of trade agreements covering tariffs but also provisions on aspects such 
as investm ent, services, public procurement, trade facilitation and technical regulations. Brazil's 
priority is, inter alia , to end agricultural protectionism abroad and to discipline subsidies and other 
distorting domestic support policies in this sector.17 
2.4  Trade La ws and Regulations  
2.4.1   Regulatory framework and reform  
2.14.   During the review period, Brazil's legal instruments remained unchanged. They comprise, in 
the following hierarchical order from highest to lowest: amendments to the Constitution; 
supplementary laws; ordi nary laws; delegated laws; provisional measures; and, legislative 
decrees. These legal instruments are higher than other instruments such as resolutions, ministerial 
ordinances ( portarias ), contracts and sentences.18 Since its last TPR, new trade and trade -related 
legislation has been passed in several areas including trade facilitation, anti -dumping, state 
enterprises, public procurement, tax refunds ( Reintegra ), intellectual property rights, automotive, 
and digital marketing (Sections 3 and 4). No data on the number of laws/regulations at federal, 
state and municipal levels or appraisals on the impact of regulatory barriers/burdens to the 
economy were available from the authorities.  
2.15.   No major regulatory reform was undertaken during the largest part of the r eview period. 
The regulatory policy agenda dates back to 2007 when the Programme for the Strengthening of 
Institutional Capacity for Regulatory Management (PRO -REG) was established, and it has so far 
strongly focused on the procedures of regulatory agencie s.19 In November 2015, CAMEX and the 
International Trade Administration of the United States Department of Commerce signed a 
Memorandum of Intent on the promotion of good regulatory practices and increased transparency 
                                                                                                                                                  
Brazil's closedness to trade , World Bank Policy Research Working Paper 7228, April. Viewed at: 
http://documents.worldbank.org/curated/en/345971468186871924/pdf/WPS7228.pdf . 
15 Araújo, S. and D. Flaig (2016), Quantifying the Effects of Trade Liberalisation in Brazil: A Computable 
General Equilibrium Model (CGE) Simulation , OECD Economics Department Wor king Papers, No. 1295. Viewed 
at: http://dx.doi.org/10.1787/5jm0qwmff2kf -en.  
16 Telesur online information, "Brazilian Trade Minister Outlines Foreign Trade Policies", 9 August 2014. 
Viewed at: http://www.telesurtv.net/english/news/Brazilian -Trade -Minister -Outlines -Foreign -Trade -Policies -
20140809 -0047.html . 
17 Statement by President Michel Temer at the opening of the general debate of the 71st session of the 
United Nations General Assembly, 20 September 2016. Viewed at: http://www.itamaraty.gov.br/pt -
BR/disc ursos -artigos -e-entrevistas -categoria/presidente -da-republica -federativa -do-brasil -discursos/14756 -
pronunciamento -do-senhor -do-presidente -da-republica -michel -temer -durante -abertura -do-debate -geral-da-
71-assembleia -geral-das-nacoes -unidas -nova-york-20-de-setembro -de-2016; Statement by Minister 
Mauro  Vieira on the occasion of the Opening Session of the 10th WTO Ministerial Conference in Nairobi on 
16 December 2015. Viewed at: http://www.itamaraty.gov.br/pt -BR/discursos -artigos -e-entrevistas -
categoria/ministro -das-relacoes -exteriores -discursos/12730 -discurso -do-ministro -mauro -vieira -por-ocasiao -da-
sessao -de-abertura -da-x-conferencia -ministerial -da-omc-nairobi -16-de-dezembro -de-2015-ingles#eng . 
18 The very detailed Constitution tou ches on numerous economic issues, thus requiring frequent 
amendments to update the constitutional framework when significant reforms are envisaged. Article 59 of the 
Constitution; OECD (2008), "Government capacity to assure high quality regulation in Brazi l", Reviews of 
Regulatory Reform: Brazil 2008 . Viewed at: http://www.oec d-ilibrary.org/governance/oecd -reviews -of-
regulatory -reform -brazil -2008/government -capacity -to-assure -high-quality -regulation -in-
brazil_9789264042940 -4-en. 
19 WTO document WT/TPR/S/283/Rev.1, 26 July 2013; OECD online factsheet, "Indicators of Regulatory 
Policy and Governance for Latin America 2016 – Brazil". Viewed at: http://www.oecd.org/gov/regulatory -
policy/Brazil -regulatory -policy -ireg-2016.pdf . WT/TPR/S/358 • Brazil  
 
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  in the rule -making process in order to  promote bilateral commerce and investment.20 Negative 
economic growth and fiscal scarcity brought the issue of improving Brazil's regulatory system (so 
as to attract investment, raise competitiveness and create jobs) to a strategic position in the 
Federal Government's agenda. In 2016, the Executive prepared a bill on the administration, 
organization and social control of the Federal Regulatory Agencies. The bill, which, inter alia , 
proposes new rules on the standardization of the decision -making process thr ough consultation 
and public hearings as well as the adoption of RIAs for the development of new regulations or the 
revision of existing ones, was approved by the Senate, and by January 2017 was at the National 
Congress. A working group, coordinated by Cas a Civil and composed of public servants with 
previous experience in regulatory impact assessments (RIAs) from all federal regulatory agencies, 
was created to elaborate a decree introducing the general standards for RIAs at federal level. Casa 
Civil is also , inter alia , working to invigorate the PRO -REG. As of 2016, CAMEX reinforced its 
authority to in advance approve the introduction or modification of administrative requirements 
and direct and indirect control over trade operations proposed by federal agen cies.21  
2.16.   During the review period, the use of evidence in the regulatory process through ex ante 
RIAs has been adopted by several regulatory agencies; although according to the OECD this is not 
yet a consistent practice across the whole administration, all federal regulatory agencies have 
implemented at least one RIA pilot project.22 The systematic use of ex post  evaluation to assess 
whether regulations achieve their objectives is mostly unexplored, but some agencies are starting 
to revise the existing regula tions aiming to simplify and revoke unnecessary or out -of-date 
regulations/acts.23 Moreover, Brazilian agencies have established fairly advanced consultation 
systems to ensure stakeholder engagement and public participation in the process of regulation.24 
In August 2016, in partnership with the private sector and government regulatory agencies, the 
Brazilian Association of Regulatory Agencies (ABAR), a non -governmental organization, launched a 
guide on the dimension and indicators for the monitoring and evalu ation of regulatory activity at 
federal level.25 Many agencies, including the National Agency for Surface Transportation (ANTT) 
and the National Waterways Transportation Agency (ANTAQ), have been using these indicators.  
2.4.2   Transparency  
2.17.   Brazil attaches importan ce to making laws transparent and readily accessible, including by 
foreigners. Since 2012, the Federal Government has provided citizens, under the Access to 
Information Act (FOIA), with a unified platform for registering online access to information 
reques ts. Recently, the platform has been improved so that it is now possible for foreigners to file 
an online access to information request ( http://www.informacao.gov.br ). Under the 2016 National 
Policy on Open Data,  the Federal Official Gazette must be availab le in an open format within 
                                                
20 Viewed at : http://arquivos.portaldaindustria.com.br/app/conteudo_18/2013/01/31/3081/2015 -MDIC -
DOC-19-nov-MOI-Coerencia -Regulatoria -PT.pdf . 
21 CAMEX promotes transparency of trade regulation, reviews the regulatory stock and sets priorit y 
areas for regulatory improvement related to trade and investment. Decree 4.732/2003 as amended by Decree 
No. 8,807/2016.  
22 At the time of the  previous TPR , six out of 10 federal regulatory agencies benefited from RIA pilot 
projects. They consisted of the National Motion Pictures Agency (ANCINE), the National Agency of Energy 
Electricity (ANEEL), the National Petroleum, Natural Gas and Bi ofuels Agency (ANP), the National Agency for 
Supplementary Health (ANS), the National Waterway s Transportation Agency (ANTAQ) and the National Health 
Surveillance Agency (ANIVSA).  
23 For example, in November 2016, ANP opened a public consultation to revoke 343 rul es considered out 
of date in relation to the current technology and regulatory framework. In 2014, after a similar procedure, 
174 rules were revoked. Likewise, in December 2016, Anatel opened for public consultation the proposal to 
abolish 36 rules regardi ng the certification and homologation of telecommunications products. Also in 2016, 
Anvisa, in cooperation with the National Confederation of Industry (CNI), revised and consolidated 1 ,200 rules 
issued in the last 16 years affecting food industries, health  products, medicines, among others. For information 
see ANP online information. Viewed at: http://www.anp.gov.br/wwwanp/cons ultas-audiencias -publicas/em -
andamento/3165 -consulta -e-audiencia -publicas -n-21-2016; ANATEL online information. Viewed at: 
https: //sistemas.anatel.gov.br/SACP/Contribuicoes/TextoConsulta.asp?CodProcesso=C1968&Tipo=1&Opcao=fi
nalizadas ; and Portal da Industria online information. Viewed at: 
http://www.portaldaindustria.com.br/cni/imprensa/2016/11/1,101816/cooperacao -entre -cni-e-anvisa -da-
mais-transparencia -a-1-200-normas -que-impactam -a-industria.html . 
24 OECD (2016), Government at a Glance: Latin America and the Caribbean 2017 , OECD Publishing. 
Viewed at: http://www.oecd.org/gov/government -at-a-glance -latin-america -and-the-caribbean -2017-
9789264265554 -en.htm .  
25 ABAR online information. Viewed at: http://abar.org.br/wp -content/uploads/2016/08/Manual -Abar-
03-08-16-SITE-1.pdf.  WT/TPR/S/358 • Brazil  
 
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  180 days of publication.26 Brazilian laws can be obtained from the main legislation website 
(http://www4.planalto.gov.br/legislaca o), as well as the websites maintained by relevant 
ministries and agencies. Citizens have access to webcasting on the Federal Government's 
legislation portal and they can receive updates on laws of interest to them to their e -mail accounts 
(http://www.saj.planalto.gov.br/saj/Boletins.nsf/frmInscricaoWeb?OpenForm ). Some Brazilian 
laws are available in English or Spanish on the websites of the Ministry of Foreign Affairs  and the 
Ministry of Industry, Trade and Services. Moreover, the Brazilian Legal and Legislative Information 
Portal (LexML) consolidates within a single database legislative and legal information from the 
main bodies of the legislative, judiciary and execu tive branches, as well as some sub -national 
entities ( http://projeto.lexml.gov.br/documentacao/resumo -em-ingles ). Both the House of 
Representatives ( http://www2.camara.leg.br/atividade -legislativa/legislacao ) and the Senate 
(http://www25.senado.leg.br/web/atividade ) have a legislation portal through which  it is possible 
to keep track of all the phases of the law -making process. In order to enhance transparency, as 
from 2013 CAMEX has required that all international trade -related information be published 
online.27 In 2014, MDIC and the Ministry of Foreign Af fairs (MRE) created an online information 
dissemination platform, Invest & Export Brazil ( http://www.investexportbrasil.gov.br/home?l=en ), 
to provide information including on legislation, docum entation and procedural requirements, 
taxation, export financing, trade promotion, and business opportunities.  
2.18.   During the review period, Brazil made many notifications to the WTO (Table A2.1); it also 
submitted tariff and trade data annually to the WTO In tegrated Data Base.28 Nevertheless, most of 
its trade agreements under the Latin America Integration Association (LAIA) have not yet been 
notified (Section 2.6.2 and Table 2.1).  
2.19.   In all countries, lack of transparency, and thus lack of public accountability,  creates scope 
for administrative discretion and therefore corruption. With a view to fighting corruption, since 
17 December 1997, Brazil has been a signatory to the 1997 OECD Convention on Combating 
Bribery of Foreign Public Officials in International Bus iness Transactions (ratification on 
24 August  2000, implementation 11  June 2002), whose 41  parties (as at May 2014) are required 
to make foreign bribery a crime.29 It is also a signatory to the 2005 UN Convention against 
Corruption, the first global compreh ensive international anti -corruption agreement, whose 
181 parties (as at end -2016) are required to establish criminal and other offences to cover a wide 
range of acts of corruption; Brazil ratified the convention on 15 June 2005.30 Accord ing to the 
2014 report of the OECD Working Group on Bribery, of the 14 allegations since Brazil joined the 
OECD Convention, only five have been investigated and three investigations were still ongoing – a 
very low number in light of the size of Brazil's economy; it, inter al ia, recommended that Brazil be 
more proactive in detecting, investigating and prosecuting foreign bribery.31  
2.20.   During the review period, Brazil introduced and implemented legislation, the so -called Clean 
Company Act, establishing a corporate anti -corruption regime.32 The Law, inter alia , prohibits 
                                                
26 In addition to the Federal Government, several states and municipalities are already disclosing 
legislation in an open format, as ha s been done by the City Hall of Sao Paulo -SP 
(http://dados.prefeitura.sp.gov.br/ ) and the City Hall of Recife -PE 
(http://dados.recife.pe.gov.br/es/dataset/diario -oficial ). Decree No. 8,777/2016.  
27 CAMEX Resolution No. 78/2013.  
28 WTO document G/MA/IDB/2/Rev.44, 3 October 2016.  
29 In 2015 , Brazil ranked 76thout of 168 countries (69th out of 174 in 2012) on Transparency 
International's Corruption Perceptions Index (CPI), which measures the perceived level of public sector 
corruption.  Brazil received a transparency score of 38/100 (higher is better), slightly below the Americas 
regional average (40/100) and the global average (43/100). According to the Transparency International 
Global Corruption Barometer 2013, the political parties, the legislature and the police were perceived  as among 
the most corrupt institutions in Brazil. Transparency International online information. Viewed at: 
http://www.transparency.org/cpi2012/results , http://www.transparency.org/cpi2015 , 
http://www.transparency.org/gcb2013/in_detail/ , and 
http://www.transparency.org/gcb2013/country/?country=brazil ; OECD online information. Viewed at: 
http://www.oecd.org/dataoecd/59/13/40272933.pdf ; and UNODC online in formation. Viewed at: 
http://www.unodc.org/unodc/en/treaties/CAC/signatories.html .  
30 UN online information. Viewed at: http://www.unodc.org/unodc/en/treaties/CAC/signatories.html . 
31 OECD (2014), Phase 3 Report on Implementing the OECD Anti -bribery Convention in Brazil , October. 
Viewed at: http://www.oecd.org/corruption/anti -bribery/Brazil -Phase -3-Report -EN.pdf . 
32 Law No. 12,846 of 1 August 2013 and implementing Decree No. 8,420 of 18 March 2015; Jones  Day 
online information. Viewed at: http://www.jonesday.com/files/Publication/3c9b0192 -a812-4849-b9fb-WT/TPR/S/358 • Brazil  
 
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  direct and indirect acts of bribery or attempted bribery of Brazilian public officials or foreign public 
officials as well as bid rigging and fraud in the public procurement process. Administrative fines 
range from 0 .1% to 20% of the responsible company's prior year's gross revenue (taxes 
excluded). If, however, authorities are unable to assess the gross revenues for the prior year, an 
alternative fine applies, which ranges from R$6,000 (approx. US$3,000) to R$60  million (about 
US$30 million). It is important to note that the Law states that these fines can never be lower than 
the benefit obtained by the responsible company. The judicial penalties for responsible companies 
include: disgorgement of benefits obtained by the illegal act, suspension or partial interruption of 
the company's activities, or dissolution of the legal entity. Companies may also be banned from 
receiving government assistance in the form of subsidies, grants, donations, or loans for a period 
rangin g from one to five years. Administrative authorities may execute leniency agreements with 
companies that self -report violations and, inter alia , may benefit from a reduction of up to two 
thirds of the fines that could have been imposed. As at January 2017,  more than twenty leniency 
agreements were under discussion; furthermore, four companies involved in the "Car Wash 
Operation" were debarred from contracting with the Brazilian government (Mendes Júnior, 
Skanska Brasil, Iesa Óleo e Gás, and Jaraguá Equipame ntos Industriais). Regarding public officials, 
the number of annual expulsion punishments for corruption charges ranged from 420 (2014) to 
550 (2016).33 Furthermore, in 2016 a Brazilian firm (Odebrecht), Latin America's biggest 
construction company, and its  affiliated petrochemical company (Braskem), were involved in a 
corruption case abroad.34 Under the Brazilian investigation into the state -controlled PETROBRAS 
(Section 4.4.3.1.1), by December 2016 the authorities had secured 112 convictions of 83 people, 
including Odebrecht executives.  
2.21.   Since 2003, the Ministry of Transparency, Oversight and the Comptroller General (CGU) has 
been in charge of increasing administrative transparency through internal control actions, public 
auditing, prevention and fighting of corruption, and its ombudsman role. In 2010, the CGU 
launched the Pro -Ethics Company certification initiative to encourage the voluntary adoption of 
integrity measures by companies through the public recognition of those that, regardless of their 
size and field of activity, are truly committed to preventing and fighting corruption and other types 
of fraud.35 In 2016, almost two hundred companies applied for the certification and twenty -five 
companies were recognized as Pro -Ethics.   
2.5  Trade Agreements and Arran gements  
2.5.1   WTO  
2.22.   Brazil, a founding Member of the WTO, participates actively in its work, including as a 
prominent voice for developing countries, and within the BRICS group of leading emerging 
economies, and remains committed to strengthening the multilateral trade system and to the 
successful conclusion of the Doha Development Agenda (DDA).36 It accords at least MFN treatment 
to trading partners, including non -WTO Members. Brazil's trade policies have been reviewed six 
times; the last Review took on 24 and 26 J une 2013.  
2.23.   During the review period, Brazil improved its WTO commitments by ratifying the WTO Trade 
Facilitation Agreement (TFA) on 29 March 2016 and depositing its instrument of acceptance of the 
Fifth Protocol on Financial Services; it also implemented th e decisions adopted at the WTO's Eighth 
                                                                                                                                                  
96fc1e520f70/Presentatio n/PublicationAttachment/ec9bf444 -80c0-4892-af4a-
9731b3d3c57c/Brazil%20Clean%20Company%20Law.pdf . 
33 CGU online information. Viewed at: http://www.cgu.gov.br/assuntos/atividade -disciplinar/relatorios -
de-punicoes -expulsivas/arquivos/consolidado -por-ano-de-2003-a-2015.pdf . 
34 From 2007 to 2015 , more than 70% of financing support for overseas infrastructure projec ts through 
Brazil's national development bank (BNDES), equivalent to an estimated amount of US$ 2.5 billion, went to 
Odebrecht ( Sections 4.2.4.1, 4.3.4, 4.3.6, 4.4.2, 4.4.3.3.1, 4.5.3.1, 4.5.4, 4.5.5.3.1 and 4.5.7). The New York 
Times  International Edition , "A path of kickbacks for Brazilian firm", 23 December 2016.  
35 CGU online information. Viewed at: http://www.cgu.gov.br/assuntos/etica -e-integridade/empresa -
pro-etica.  
36 Brazil also participated in the Friends of Anti -Dumping Negotiations (FANs) and in the Coalition of 
Agricultural Exporting Nations Lobbying for Agricultural Trade Liberalization (NAMA -11), W52 sponsors and the 
G20. Statement by Minister of State and Exter nal Relations, Ambassador Mauro  Vieira, on the occasion of the 
Opening Session of  the 10th Ministerial Conference of the World Trade Organization (Nairobi, 16 December 
2015). Viewed at: http://www.itamaraty.gov.br/pt -BR/dis cursos -artigos -e-entrevistas -categoria/ministro -das-
relacoes -exteriores -discursos/12730 -discurso -do-ministro -mauro -vieira -por-ocasiao -da-sessao -de-abertura -
da-x-conferencia -ministerial -da-omc-nairobi -16-de-dezembro -de-2015-ingles#eng .  WT/TPR/S/358 • Brazil  
 
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  and Ninth Ministerial Conferences relating to the granting of preferential treatment to services and 
service suppliers from least developed countries (LDCs) (Sections 3.1.1 and 4. 4.2).  
2.24.   Brazil has continued to protec t its trade interests and prevent allegedly unreasonable import 
restrictions of other countries through effective use of the multilateral dispute settlement 
mechanism. Between its last Review in 2013 and April 2017, Brazil was directly involved in seven 
disputes, five as a complainant, and two as a respondent (Table 2.1). During the same period it 
also participated as a third party in 28 cases.37  
Table 2.1 WTO dispute settlement cases involving Brazil, January 2013 -April 2017  
Subject of dispute  Respondent/  
complainant  Status  WTO 
document 
series  
Respondent  
Certain Measures 
Concerning Taxation and 
Charges  Brazil/  
European  
Union  The European Union requested consultations with 
Brazil on 19  December  2013. No mutual ly agreed 
solution was reached and the European  Union 
requested the establishment of a panel on 
16 March  2015; the panel was established on 
26 March 2015.  WT/DS472  
Certain Measures 
Concerning Taxation and 
Charges  Brazil/Japan  Japan requested consultatio ns with Brazil on 
2 July 2015. No mutual agreed solution was 
reached and Japan requested the establishment 
of a panel on 17 September 2015; the panel was 
established on 29 March 2015.  WT/DS497  
Complainant  
Measures Concerning 
the Importation of 
Chicken M eat and 
Chicken Products  Indonesia/Brazil  Brazil requested consultations with Indonesia on 
16 October 2014. No mutual agreed solution was 
reached and Brazil requested the establishment 
of a panel on 15 October 2015. Indonesia 
objected to the establishment of the panel 
because a corrigendum to the panel request had 
been circulated at the request of Brazil. Given 
Indonesia's objection, Brazil requested that the 
establishment of the panel be deferred to the 
next meeting. The panel was established on 
3 March  2015.  WT/DS484  
Measures Concerning 
the Importation of 
Bovine Meat  Indonesia/Brazil  Brazil requested consultations with Indonesia on 
16 October 2014. No mutual agreed solution was 
reached and Brazil requested establishment of a 
Panel on 22 February 2016; t he panel was 
established on 3 March 2016.  WT/DS506  
Subsidies Concerning 
Sugar  Thailand/Brazil  Brazil requested consultations with Thailand on 
4 April 2016.  WT/DS507  
Countervailing Measures 
on Cold - and Hot -Rolled 
Steel Flat Products  United  States/  
Brazil Brazil requested consultations with the 
United  States on 11 November 2016.  WT/DS514  
Aircraft Subsidies  Canada/Brazil  Brazil requested consultations with Canada on 
8 February 2017.  WT/DS522  
Source:  WTO Secretariat . 
2.5.2   Regional and preferential trade agr eements (RTAs and PTAs)  
2.25.   During the review period Brazil concluded several RTAs within the framework of the Latin 
American Integration Association (LAIA) and MERCOSUR, while the negotiation of other 
agreements is under way (Table 2.2). Several of its RTAs ( e.g. with Guyana/Saint Kitts and Nevis 
(a LAIA agreement), and individual MERCOSUR agreements) remain reviewed at either the WTO 
Committee on Regional Trade Agreements or the Committee on Trade and Development. The entry 
into force of others is pending (Eg ypt, Colombia, Palestine, and Peru).38 The scope of the different 
RTAs varies widely and three of them also cover services (Table 2.2 and Section 4.5.2).   
                                                
37 WTO online inform ation. Viewed at: https://www.wto.org/english/thewto_e/countries_e/brazil_e.htm . 
38 The authorities indicated that the notification of the MERCOSUR and Southern African Customs Un ion 
(SACU) Agreement was to be presented to the WTO by the beginning of 2017. The state of play and views 
expressed on the non -notification of LAIA agreements are found in WTO documents: WT/COMTD/W/217 - 
WT/REG/W/105, 14 June 2016; WT/REG/M/81, 12 July 201 6; and, WT/REG/W/111, 1 November 2016.  WT/TPR/S/358 • Brazil  
 
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  Table 2.2 Brazil's RTAs and PTAs in force: main feature s 2017  
RTAS entered into force during the review period (2013 -17)  
Brazil – Guyana/San Kitts and Nevis (AAP.A25TM -38) 
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Brazil's merchandise tra de with Guyana/San Cristobal (2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
25/05/2012  
05/07/2012  
 
Goods  
0.005% of total imports; 0.016% of total exports  
Not yet notified  
 
Brazil – Bolivarian Republic of Venezuela (ACE 69)  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Brazil's merchandise trade with the Bolivarian Republic of Venezuela  
WTO consideration status  
WTO document series   
Partial scope agreement  
26/12/2012  
14/10/2014  
 
Goods  
0.3% of total imports; 0.7% of total exports  
Not yet notified  
 
Mercosur – Southern African Customs Union (SACU)  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Mercosur's merchandise trade with SACU (from 09/2015 to 09/2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
15/12/2008  
01/04/2016  
 
Goods  
0.24% of total imports; 0.87% of total exports  
 
RTAs entered into force before 2013  
Global System of Trade Preferences among Developing 
Countries (GSTP)  
Type of agreement  
Date of signature  
Entry into force  
End of transition period  
Coverage (selected features)  
Brazil's merchandise trade with GSTP countries  
WTO consideration status  
WTO document series   
 
Partial scope agreement  
13/04/1988  
18/04/1989  
 
Goods  
 
Factual presentation not distributed  
Protocol on Trade Negotiation (PTN)  
Type of agreement  
Date of signature  
Entry into force  
End of transition period  
Coverage (selected features)  
WTO consid eration status  
WTO document series   
Partial scope agreement  
08/12/1971  
11/02/1973  
 
Goods  
Factual presentation not distributed  
Latin American Integration Association (LAIA)  
Type of agreement  
Date of signature  
Entry into force  
End of transition period  
Coverage (selected features)  
Brazil's merchandise trade with LAIA countries (2016)  
WTO consideration status  
WTO document series   
Partial Scope Agreement  
12/08/1980  
18/03/1981  
 
Goods  
16.1% of total imports; 18.6% of total exports  
Factual presentation not d istributed  
L/5342  
Mercosur (ACE -18) 
Type of agreement  
Date of signature  
Entry into force  
End of transition period  
Coverage (selected features)  
Brazil's merchandise trade with Mercosur (2016)  
WTO consideration status  
 
WTO document series   
Customs union a nd economic integration agreement  
26/03/1991 (goods); 15/12/1997 (services)  
29/11/1991 (goods); 07/12/2005 (services)  
 
Goods and services  
8.7%  of total imports; 10.6%  of total exports  
Factual presentation distributed for services and 
factual abstract di stributed for goods  
WT/REG238/1 (services)  
Mercosur – India  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Mercosur's merchandise trade with India (from 09/2015 to 09/2016)  
WTO considerati on status  
WTO document series   
Partial scope agreement  
25/01/2004  
01/06/2009  
2009 
Goods  
1.80% of total imports; 2.23% of total exports  
Factual presentation distributed  
WT/COMTD/RTA/6/1  WT/TPR/S/358 • Brazil  
 
- 34 - 
 
  RTAs entered into force before 2013  
Mercosur – Israel  
Type of agreement  
Date of signature  
Entry int o force  
End of transition period  
Coverage (selected features)  
Mercosur's merchandise trade with Israel (from 09/2015 to 09/2016)  
WTO consideration status  
WTO document series   
Free trade agreement  
18/12/2007  
3/04/2010 (for Brazil)  
 
Goods  
0.41% of total imp orts; 0.35% of total exports  
In process of notification  
Mercosur – Chile (ACE -35) 
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Mercosur's merchandise trade with Chile (2016)  
WTO considera tion status  
WTO document series   
Partial scope agreement  
25/06/1996  
01/12/1996  
01/01/2014  
Goods and services  
2.1% of total imports; 2.2% of total exports  
Not yet notified  
 
Mercosur – Plurinational State of Bolivia (ACE -36) 
Type of agreement  
Date of sig nature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Mercosur's merchandise trade with Plurinational State of Bolivia 
(2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
17/12/1996  
28/02/1997  
01/01/201 4 
Goods  
1.6% of total imports. 0.8% of total exports  
 
Not yet notified  
 
Mercosur – Mexico (ACE -54 and ACE -55) 
Type of agreement  
Date of signature  
Entry into force  
End of transition period  
Coverage (selected features)  
Mercosur's merchandise trade with Me xico (2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
27/09/2002  
01/01/2003  
 
Goods (ACE -54) / Automotive Agreement (ACE -55) 
2.6% of total imports; 2.1% of total exports  
Not yet notified  
 
Mercosur – Peru (ACE -58) 
Type of agree ment  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Mercosur's merchandise trade with Peru (2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
30/11/2005  
02/01/2006  
01/01/2019  
Goods  
0.9% of total imports; 1.1% of total exports  
Not yet notified  
 
Mercosur – Colombia, Ecuador and the Bolivarian Republic of 
Venezuela (ACE -59) 
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Mercosur's merchandise trade with Colombia, Ecuador, and the 
Bolivarian Republic of Venezuela (2016)  
WTO consideration status  
WTO document series   
 
Partial scope agreement  
30/11/2005  
02/01/2006  
01/01/2018  
Goods  
 
1.1% of total imports; 2.2% of total exports   
Not yet notified  
 
Mercosur – Cuba (ACE -62) 
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Mercosur's merchandise trade with Cuba (2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
 
02/07/2007  
 
Goods  
0.04% of total imports; 0.17% of total exports  
Not yet notified  
 
Brazil – Uruguay (ACE -02) 
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Brazil's mer chandise trade with Uruguay  
WTO consideration status  
WTO document series   
Partial scope agreement  
 
01/12/1986  
 
Goods  
 
Not yet notified  
 WT/TPR/S/358 • Brazil  
 
- 35 - 
 
  RTAs entered into force before 2013  
Brazil – Argentina (ACE -14) 
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Cover age (selected features)  
Brazil's merchandise trade with Argentina  
WTO consideration status  
WTO document series   
Partial scope agreement  
 
20/12/1990  
 
Goods  
 
Not yet notified  
 
Brazil – Guyana (AAP.A25TM -38) 
Type of agreement  
Date of signature  
Entry into force 
End of the transition period  
Coverage (selected features)  
Brazil's merchandise trade with Guyana (2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
27/07/2001  
31/05/2004  
 
Goods  
0.004% of total imports; 0.014% of total expo rts  
Not yet notified  
 
Brazil – Suriname (ACE -41) 
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Brazil's merchandise trade with Suriname (2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
21/04/2005  
26/07/2006  
 
Goods  
0% of total imports; 0.014% of total exports  
Not yet notified  
 
Brazil – Mexico (ACE -53) 
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features ) 
Brazil's merchandise trade with Mexico (2016)  
WTO consideration status  
WTO document series   
Partial scope agreement  
03/07/2002  
02/05/2003  
 
Goods  
2.6% of total imports; 2.1% of total exports  
Not yet notified  
 
 
Agreements pending entry into force  
Merc osur – Egypt  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (selected features)  
Mercosur's merchandise trade with Egypt (from 09/2015 to 09/2016)  
WTO consideration status  
WTO document series   
Partial scope agr eement  
02/08/2010  
Pending  
10 years after entering into force  
Goods  
0.059% of total imports; 1.45% of total exports  
Not yet notified  
Mercosur – Palestine  
Type of agreement  
Date of signature  
Entry into force  
End of the transition period  
Coverage (sele cted features)  
Mercosur's merchandise trade with Palestine   
WTO consideration status  
WTO document series   
Partial scope agreement  
20/12/2011  
Pending  
10 years after entering into force  
Goods  
 
Not yet notified  
Agreement on Economic and Trade Expansion  between Brazil 
and Peru  
Type of agreement  
Date of signature  
Entry into force  
 
End of the transition period  
Coverage (selected features)  
Brazil's services with Peru  
WTO consideration status  
WTO document series   
 
Partial scope agreement  
29/04/2016  
90 da ys after both parties notify each other of the 
notification of completion of internal procedures  
 
Investment, services, and government procurement  
 
Not yet notified  WT/TPR/S/358 • Brazil  
 
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  Agreements pending entry into force  
Additional Protocol to Mercosur –Colombia (ACE 59) on Trade 
in Services  
Type of agreemen t  
Date of signature  
Entry into force  
 
 
End of the transition period  
Coverage (selected features)  
WTO consideration status  
WTO document series   
Partial scope agreement  
Pending  
Pending  
30 days after Colombia and at least one of the other 
signing Parties h ave deposited the respective 
ratification instruments  
 
Services  
Not yet notified  
Source:  WTO Secretariat, based on information from the WTO RTA database. Viewed at: 
http://rta is.wto.org/UI/PublicShowMemberRTAIDCard.aspx?rtaid=130 , and MDIC online information. 
Viewed at: http://www.mdic.gov.br/comercio -exterior/negociacoes -internacionais/132 -acordos -dos-
quais -o-brasil -e-parte. 
2.5.2.1.1   MERCOSUR39 
2.26.   The Southern Common Market (MERCOSUR) remains Brazil's main preferential agreement in 
terms of value of trade, accounting for some 10.6% of its total merchandise exports and 8.7% of 
its total merchandise imports in 2016 (Tables A1.3 and A1.4). Brazil is a MERCOSUR founding 
member together with Argentina, Paraguay, and Uruguay; the Bolivarian Republic of Venezuela 
was ratified as a full member of MERCOSUR in 2012 and was requir ed to comply with all the 
requirements and schedules to become a full member by 12 August 2016.40 On 
13 September  2016, the parties to the Treaty of Asunción issued a joint statement on the fact that 
the Bolivarian Republic of Venezuela had not fulfilled it s obligations under its Protocol of Accession 
to MERCOSUR; the case was reviewed on 1 December 2016 and, as a result of the continuing lack 
of compliance, the Bolivarian Republic of Venezuela can no longer exercise the rights inherent to 
the condition of S tate Party to MERCOSUR. This cessation does not affect the validity of the 
preferential trade agreement between Brazil and the Bolivarian Republic of Venezuela.  As part of 
MERCOSUR, Brazil maintains preferential trade agreements (Economic Complementarity 
Agreements) with Chile, the Plurinational State of Bolivia, Mexico, Peru, Colombia, Ecuador, the 
Bolivarian Republic of Venezuela, Cuba, India, and the South African Customs Union, as well as a 
free trade agreement with Israel (Table 2.2).  
2.27.   The Common Marke t Group (GMC) and the Council for the Common Market (CMC) are the 
main executive and decision -making bodies of MERCOSUR. MERCOSUR's Trade Commission is 
responsible for the application of common trade policy instruments. MERCOSUR member States 
share a commo n external 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 f or each 
country. In July 2015, Decision CMC 26/15 authorized Brazil to maintain a basic list of national 
exceptions to the CET within its WTO bound rates; it can also request temporary reduction of the 
CET and import capital goods and informatics and telec ommunication Goods with tariffs lower than 
those of the CET (Section 3.1.3.1). There are also exceptions to the CET for toys, dairy products 
and peaches. The sugar and automotive sectors are the only exclusions to the free movement of 
goods within MERCOSUR , and there is no schedule for the inclusion of sugar in MERCOSUR's free 
trade regime. Trade in the automotive sector between Brazil and MERCOSUR members remains 
largely regulated by bilateral agreements, which were renegotiated in the period under review.  
During the review period, Brazil renegotiated its bilateral free trade agreement with Argentina, 
Uruguay and Mexico (imposing a tariff rate quota limiting the duty -free entry of motor vehicles 
until 2019) (Section  4.3.5). According to the authorities, pla ns to consolidate parallel RTAs involve 
the improvement of the existing agreement with Mexico, and the conclusion of an RTA between 
MERCOSUR and the Bolivarian Republic of Venezuela to be possibly implemented in 20 18 (ACE  69 
has already been signed, and th e automotive sector is already partially covered by ACE 59).41  
                                                
39 More information on MERCOSUR issues may be found in WTO document WT/TPR/S/283/Rev.1, 
26 July 2013.  
40 The block was established in 1991 by the Treaty of Asunción, and its institutional structure was 
defined in the 19 94 Protocol of Ouro Preto. MERCOSUR is incorporated in to the LAIA legal regime under  
Economic Complementarity Agreement No. 18. LAIA economic complementarity agreements must be open for 
accession by any LAIA country.  
41 MERCOSUR authorizes its members to co nduct bilateral negotiations with trading partners in areas 
where it has proven difficult to reach consensus when negotiating as a block with that particular partner.  WT/TPR/S/358 • Brazil  
 
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  2.28.   The 2004 Agreement on the Elimination of Double Collection of CET and the Distribution of 
Customs Revenue in MERCOSUR, approved by Decision 54/04, grants local MERCOSUR status to 
imported produ cts that conform to the Common Tariff Policy (PAC). Its implementation consists of 
three stages.42 The first stage entails the granting of a zero CET rate to all merchandise imported 
by a member country that is subject to 100% preferential tariff treatment under MERCOSUR 
agreements with third parties. The second stage would cover the remaining goods.43 The third 
stage would require implementing a customs revenue distribution mechanism and the unification 
of customs systems in all member States. Since 2010, ME RCOSUR member States have been 
negotiating the implementation of these three phases, accor ding to Decisions CMC  10/10 
and 56/10.  
2.29.   During the review period, the negotiations on a comprehensive free trade agreement 
between MERCOSUR and the European Union, a priority for Brazil, progressed and they are to be 
completed by 2018.44 In May 2016, Brazilian and EU representatives exchanged offers in goods, 
services, government procurement, and investment. In 2016, there was an exchange of offers 
related to the expans ion of the existing MERCOSUR –India agreement.45 In 2016, MERCOSUR and 
the European Free Trade Association (EFTA) completed a free trade agreement scoping exercise to 
identify negotiation issues and in early 2017 announced the intention to launch negotiation s on a 
comprehensive free trade agreement. Since the last TPR, MERCOSUR has held discussions with 
Canada and Japan with a view to exploring the possibility of negotiating free trade agreements. As 
at early March 2017, MERCOSUR and Korea (Rep. of) had concl uded their exploratory process in 
this area and Brazil was holding internal consultations to examine the possibilities of a trade 
agreement with this trading partner. Brazil also attaches high priority to trade negotiations 
between MERCOSUR and Mexico.  
2.30.   Dispute settlement in MERCOSUR is regulated by the 2002 Protocol of Olivos, in force since 
January 2004. Member States may choose to file trade disputes either within the MERCOSUR or 
the WTO dispute settlement mechanism. Brazil did not participate in any disp utes within 
MERCOSUR during the review period.46  
2.5.2.1.2   Other arrangements  
2.31.   Brazil continues to participate in the 1998 Global System of Trade Preferences among 
Developing Countries (GSTP), and grants preferences to participating countries on some 
98 HS96  tariff h eadings (Table 2.2). These preferences range from 10% to 100% and their scope 
includes agricultural products, fuels, chemical products, hides and skins, ferrous and steel 
products.  
2.32.   Brazil remains a beneficiary of the Generalized System of Preferences (GSP ) schemes of 
Australia, Belarus (since 2015), Japan, Kazakhstan, New Zealand, Norway, the Russian  Federation, 
Switzerland (since 2014), and the United States.47  
2.6  Foreign Investment Regime  
2.33.   Brazil remains open to and encourages foreign direct investment (FDI)  which is prevalent 
across the economy despite foreign ownership limitations in certain sectors. Notwithstanding a 
drop in FDI inflows in 2015 due to economic recession and political turmoil, Brazil's huge market 
opportunities maintained its position as th e most attractive investment location in Latin America 
                                                
42 MERCOSUR CMC/DEC 10/10.  
43 This stage is subject to the ratification and entry into forc e of the Customs Code. 
MERCOSUR  CMC/DEC 27/10 and MERCOSUR CMC/DEC 34/11.  
44 Negotiations between MERCOSUR and the European Union began in 1999, were interrupted in 2004 
and were relaunched in 2010. MDIC online information. Viewed at: http://www.mdic.gov.br/comercio -
exterior/negociacoes -internacionais/9 -assuntos/categ -comercio -exterior/1566 -mercosul -uniao -europeia ; and 
http://www.mdic.gov.br//noticias/2159 -ministros -do-brasil -e-da-argentina -definem -2018-como -meta-para-
fechar -acordo -mercosul -ue. 
45 MDIC online information. Viewed at: http://www.mdic.gov.br/comercio -exterior/ negociacoes -
internacionais/9 -assuntos/categ -comercio -exterior/1567 -ampliacao -do-acp-mercosul -india. 
46 MERCOSUR online information. Viewed at: http:/ /www.mercosur.int/t_generic.jsp?contentid=374& 
site=1&channel=secretaria&seccion=5 .  
47 UNCTAD (2015), Generalized System of Preferences – List of Beneficiaries , 1 February. Viewed at: 
http://unctad.org/en/PublicationsLibrary/itcdtsbmisc62rev6_en.pdf . WT/TPR/S/358 • Brazil  
 
- 38 - 
 
  and the Caribbean, capturing 42% of FDI to the region.48 Despite some improvement, new 
investment undertakings in Brazil seemingly remain cumbersome, bureaucratic and expensive in 
terms of the rigidity involved in both starting and closing a business, owing to the many 
procedures required and their high cost. The tax burden and labour market rigidities also remain 
an issue.49  
Regulatory framework  
2.34.   During the review period, the main legislation governing f oreign investment in Brazil 
remained largely unchanged.50 Its 2014 amendments covered improvements on issues relating to 
non-resident investors, foreign capital in Brazil and Brazilian capital in foreign countries.51 Since 
the 1995  constitutional amendments,  foreign and national capital have received the same legal 
treatment under equal circumstances which prohibit all forms of discrimination not explicitly 
foreseen in the law. Legally registered companies compete on an equal footing when bidding on 
contracts  or seeking tax and non -tax incentives. Although no rules expressly prohibit foreign 
takeovers, special authorization is required for deals made via share purchase on the stock 
market.   
Restricted activities  
2.35.   Brazil continues to follow a "negative" list app roach in restricting FDI and national interest 
provisions are found in its Constitution. According to the authorities, during the review period, 
95% of FDI applications were approved and rejections were due to non -compliance with domestic 
legal requirement s.52 Restrictions on foreign investment affect some activities including nuclear 
power and certain postal services (Table 2.3 and Section 4.5). In 2015, healthcare services were 
opened to foreign investment by allowing the participation of foreign capital c ompanies in 
supplementary healthcare services thus providing new opportunities for companies and 
investments in the health sector (Section 4.5.8.4).53 As of January 2017, in an effort to pull the 
economy out of a two -year recession,  the Government was to pr opose legislation to lift restrictions 
on foreign ownership of airlines and agricultural land in Brazil.54 Foreigners and foreign -controlled 
                                                
48 According to UNCTAD data, Brazil dropped from the world's fourth -largest recipient of FDI inflows in 
2014 to the eighth position in 2015. United Nations Conference on Trade and Development (2016), World 
Investment Report 2016 - Investor Nationality: Policy Challenges , Geneva. Viewed at: 
http://unctad.org/en/PublicationsLibrary/wir2016_en.pdf ; UN Economic Com mission for Latin America and the 
Caribbean (2016), Foreign Direct Investment in Latin America and the Caribbean 2016 , June. Viewed at: 
http://repositorio.cepal.org/ bitstream/handle/11362/40214/6/S1600662_en.pdf ; and EIU (2016), Country 
Commerce – Brazil , September.  
49 According to the World Bank's Doing Business 2016 Report, Brazil' s rank improved from 126th out of 
183 countries in 2012 to 116th out of 189 countries in 2016 in overall terms of the ease of doing business. 
Brazil was ranked 174th in 2016 in terms of ease of starting a business, down from 120th in 2012. There was an 
improvement in the number of days needed  to start a business from 119 days in 2012 to 83 days in 2016. 
Furthermore, in terms of access to credit, Brazil ranked 97th in 2016 compared to 98th in 2012. World Bank 
(2016), Doing Business 2016: Measuring Regulatory Quality and Efficiency . Viewed at: 
http://www.doingbusiness.org/~/media/WBG/DoingBusiness/Documents/Annual -Reports/English/DB16 -Full-
Report.pdf ; and http://portugues.doingbusiness.org/reports/global -reports/doing -business -2016; and EIU 
(2016), Country Commerce – Brazil , September.   
50 Foreign investment is regulated by: Law No. 4,131 of 3 September 1962 (Foreign Capital Law); 
Decree No. 55,762 of 17 February 1965; Law No. 4,390 of 29 August 1964; and Resolution No. 3,844 of 
23 March 2010.  
51 Resolution No. 4,373 of 29 September 2014; Resolution No. 4,319 of 27 March 2014.  
52 Article 172 of the Constitution stipulates that the l aw shall regulate, based on national interests, the 
foreign capital investments, shall encourage reinvestments and shall regulate the remittance of profits.  
53 Law No. 13,097 allows for the direct or indirect participation, including control, of companies o r 
foreign capital in healthcare ; it is, inter alia , permitted in the following cases: donations from international 
organizations linked to the United Nations, technical cooperation entities, and financing and loans; legal 
entities intended to install or op erate general hospital s, including philanthropic, specialized hospital s, 
polyclinic s, general clinic s and specialized clinic s, and family planning actions and research; health services 
maintained by non -profit making companies for the care of their employe es and dependents, without any 
burden for social security; and, other cases provided for in specific legislation. Direct or indirect participation of 
companies or foreign capital in health actions and services , as well as healthcare support activities by h uman 
genetics laboratories, production and delivery of medicines and health products, clinical analysis laboratories, 
pathological anatomy and diagnostic imaging , is free. Law No. 13,097 of 19 January 2015 which modifies Law 
No. 8,080/1990. Viewed at: http://www.planalto.gov.br/CCIVIL_03/_Ato2015 -2018/2015/Lei/L13097.htm . 
54 The opening of airlines to foreign investment would be aimed at reopening regional routes that were  
abandoned. The lifting of the agricultural land ban could be subject to the condition that 10% of any purchase WT/TPR/S/358 • Brazil  
 
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  companies and businesses may not own land in specified areas within 150 kilometres of Brazil's 
national borders, dir ectly on its coasts or in any other geographical areas designated and defined 
as sensitive for national security; foreign -ownership of these areas requires authorization from the 
Brazilian National Security Council, among other procedures.  
Table 2.3 Indicative list of FDI closed and restricted sectors, 2017  
Sector/business  FDI limitation  
A. Closed   
Postal services  Pick-up, transport and delivery of letters, postcards and grouped correspondence, as well 
as issuance of stamps and other postage payments  
Nuclear energy  Wholly closed  
B. Restricted   
Air transport  Allowed with most of the capital share belonging to Brazilians (up to 20% of foreign 
ownership) and 80% of voting share capital belonging to Brazili ans 
Financial institutions  Subject to authorization, which depends on technical analysis and on the issuance of a 
presidential decree stating that the operation is beneficial to Brazil  
Health services  Allowed for specific activities  
Rural land acquisiti on Allowed up to a certain surface and subject to authorization of the National Institute of 
Colonization and Agrarian Reform (INCRA) and other public agencies; FDI in rural areas 
close to the boarder requires authorization from the Brazilian National Secu rity Council, 
among other procedures  
Broadcasting (TV and radio) and 
publishing media  Up to 30% of the capital in open -broadcast and publishing media companies  
Broadcasting subject to local content requirement  
Fishing, mining and 
hydrocarbons  Subject to  specific authorization requirements  
Source:  WTO Secretariat based on information supplied by the Brazilian authorities.  
Registration and approval  
2.36.   Incoming foreign investment in all forms must be registered online with the Central Bank 
through the Electr onic Statement of Registration – Foreign Direct Investment Module (RDE -IED), 
on the Central Bank's Information System (SISBACEN). Foreign capital must be registered in 
specific modules according to the following classification: foreign direct investment (I ED); financial 
operations (e.g. loans, long -term import financing, technical assistance and royalties contracts 
(ROF)); and, portfolio investments. Guarantees provided by international organizations in internal 
credit operations must be registered as well.  Foreign capital must be registered within 30 days of 
the date it enters Brazil or after customs clearance in the case of goods.55 Remittances abroad, 
reinvestment of profits, dividends, and other resources, and repatriation of invested capital must 
also be  registered with the Central Bank. Foreign capital does not require Central Bank 
authorization provided it is registered. The invested sum must be registered in the currency in 
which the investment was made.56  
2.37.   No restrictions on remittance of dividends or profits abroad, other than their adequate 
registration in the RDE -IED module, remain in place. Remittances paid to foreign shareholders or 
partners are not taxed. The same conditions apply for reinvestment. The capitalization of profits, 
dividends, interes t on equity capital and profit reserves in the receiving company in which they 
were produced are registered under the reinvestment item of the IED module of the RDE. The 
registration of reinvestment is made in the currency of the country to which income co uld 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.  
Investment promotion  
2.38.   During the review period Braz il continued to promote foreign and local investment through 
tax incentives, concessional finance, cash grants and industrial site support in several areas 
including transport infrastructure and the energy sector where FDI participation is allowed through 
Public -Private Partnerships, joint ventures or concessions (sections 3 and 4). The Ministry of 
Foreign Affairs (MRE) – along with the Brazilian Trade and Investment Promotion Agency 
(Apex -Brasil) –, in coordination with the Ministry of Industry, Foreign Tra de and Services (MDIC) 
                                                                                                                                                  
is destined to land reform to benefit landless farmers and peasants. Reuters online information, "Brazil to open 
airlines, agricultural land to foreign buyers – sources", 30 January 2017. Viewed at: 
http://finance.yahoo.com/news/brazil -open-airlines -agricultural -land-212205876.html . 
55 Resolution No.  3,844 of 23 March 2010.  
56 Resolution No. 3,844 of 23 March 2010.  WT/TPR/S/358 • Brazil  
 
- 40 - 
 
  along with other agencies (e.g. Ministry of Agriculture and Ministry of Science and Technology) and 
the National Confederation of Industry (CNI) develop tools for attracting FDI in Brazil. As from 
2003 Apex -Brasil is, inter alia , in charge of promoting Brazilian products and services abroad as 
well as attracting FDI to strategic sectors of the economy and supporting investors during the 
entire investment process.57 The MDIC is responsible for managing in cooperation with other 
federal states departments of industry and trade as well as entrepreneurs associations the 
2003 National Investment Information Network (RENAI), which provides information about 
legislation and government programs and projects to investors.58 Furthermore, the MRE c ontinues 
to promote investment in Brazil through its Trade Promotion Sections (SECOMs) located in 
104 embassies and consulates around the world;  SECOMs budget stood at R$30.4 million in 2013, 
R$52.7 million in  2014, R$46.8 million in 2015, and R$70 million  in 2016 .59 In 2016 the National 
Investment Committee (CONINV) was established to elaborate proposals aimed at encouraging 
incoming FDI.60 
Bilateral treaties and international cooperation  
2.39.   Since the 1990s, Brazil has become a signatory to 14 bilateral invest ment, promotion and 
protection agreements (BITs) that are being replaced by cooperation and facilitation investment 
agreements (CFIAs) (see below).61 Brazil has negotiated two MERCOSUR protocols on investment: 
the Buenos Aires Protocol (extra -MERCOSUR), and  the Colonia Protocol (intra -MERCOSUR).62 
However, none of these bilateral agreements or MERCOSUR protocols has ever entered in force, 
either because the Executive did not submit the agreement to the National Congress 
(e.g. Colonia  Protocol) or because it w ithdrew the agreement prior to voting by the Congress (e.g. 
Buenos Aires Protocol and all the above -mentioned BITs). This situation reflected the concerns of 
the National Congress about the constitutionality of these agreements with respect to issues such 
as upholding the principle of full equality for investors under the law.63  
2.40.   To address key shortcomings in traditional BITs' legal loopholes, a new model of investment 
agreements, the Cooperation and Facilitation Investment Agreement (CFIA) built upon CAMEX , 
UNCTAD and OECD guidelines and based on risk mitigation, institutional governance and thematic 
agendas, was developed and used as from 16 July 2013.64 Brazil has signed CFIAs with 
Mozambique (30  March  2015), Angola (1 April 2015), Mexico (26  May 2015), Ma lawi 
(25 June 2015), Colombia (9 October 2015), Chile (23 November 2015), and Peru (29 April 2016). 
Nevertheless, as they are pending the approval of Congress, these agreements are not yet in 
force. By 1 January 2017, the CFIAs with Angola, Malawi and Moza mbique had been approved by 
the Chamber of Deputies and approval by the Senate was pending; their ratification is expected in 
the course of 2017. The remaining agreements are still being reviewed by the National Congress. 
Further CFIA negotiations are ongo ing and the signing of at least three new CFIAs is expected in 
early 2017 (e.g. India, and Jordan). A Cooperation and Facilitation of Investments Protocol of 
MERCOSUR (PCFI) was signed in April 2017 and exploratory discussions are under way with 
Ethiopia, Morocco, South Africa, Thailand, Tunisia and The former Yugoslav Republic of Macedonia 
to which Brazil presented its CFIA model.  
2.41.   Brazil adhered to the Convention Establishing the Multilateral Investment Guarantee Agency 
(MIGA) in 1992, and joined the OECD  Investment Committee in 1998 as an observer. It has not 
joined the International Centre for Settlement of Investment Disputes as it considers that its rules 
of procedure would provide better protection to foreign investors compared to domestic investors. 
Prior to becoming an OECD observer, Brazil subscribed to its 1976 Declaration and Decisions on 
International Investment and Multinational Enterprises . 
                                                
57 APEX online information. Viewed at: http://www.apexbrasil.com.br/en/home . 
58 MDIC online information. Viewed at: http://investimentos.mdic.gov.br/ . 
59 SECOM online information . Viewed at: www.investexportbrasil.gov.br . 
60 Federal Decree No. 8.807/2016.  
61 These BITs involve Belgium -Luxembou rg, Chile, Cuba, Denmark, Finland, France, Germany, Italy, the 
Republic of Korea, the Netherlands, Portugal, Switzerland, the United Kingdom, and the Bolivarian Republic of 
Venezuela. MDIC online information. Viewed at: http://www.mdic.gov.br/comercio -exterior/negociacoes -
internacionais/9 -assuntos/categ -comercio -exterior/1565 -acordo -de-cooperacao -e-facilitacao -de-investimentos . 
62 MERCOSUR Decision No. 11/94, Protocol on Promotion and Protection of Investment Proceeding from 
Non-Member Countries of the MERCOSUR; and MERCOSUR Decision No. 11/93, Protocol of Colonia for the 
Promotion and Reciprocal Protection of Investments in MERCOSUR (investment within member countries).  
63 More information on this matter is available at WTO document WT/TPR/S/283/Rev.1, 26 July 2013.  
64 MDIC online information. Viewed at: http://www.mdic.gov.br/comercio -exterior/negociacoes -
internacionais/9 -assuntos/categ -comercio -exterior/1565 -acordo -de-cooperacao -e-facilitacao -de-investimentos . WT/TPR/S/358 • Brazil  
 
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  3  TRADE POLICIES AND P RACTICES BY MEASURE  
3.1  Measures Directly Affecting Imports  
3.1.1   Customs procedures, valuati on, and requirements  
3.1.  Since 2014, work on streamlining foreign trade procedures and formalities has been taking 
place under Brazil's Single Window Programme ( Programa Portal Único de Comércio Exterior ). The 
programme's focus is on optimizing the interventio ns and information flows among all stakeholders 
involved in the import, export and transit of goods. Unless exempted, commercial imports must be 
declared in the Integrated Foreign Trade System (SISCOMEX), which is being redesigned to 
become a full -fledged single window for trade in goods by the end of 2018.1  
3.2.  Access to SISCOMEX is managed by the Secretariat of Federal Revenue of Brazil (RFB), which 
issues user accreditations ( habilitação ) free of charge and with unlimited validity. Depending on 
their estima ted financial capacity, applicants may qualify for one of the following three 
accreditation types: express (c.i.f.  value of imports capped at US$50,000 per semester)2; limited 
(c.i.f. value of imports capped at US$150,000 per semester); or unlimited.3 According to the 
authorities, the transaction value caps associated with the first two accreditation types are 
maintained for risk -mitigation purposes. To qualify for an unlimited accreditation, importers must 
demonstrate that their actual financial capacity e xceeds US$150,000 per semester.4 If an 
applicant's request for accreditation/revision of financial capacity estimate has been rejected, a 
subsequent application would not be considered in the six months following the rejection.5 
3.3.  Upon completing their first  transaction in SISCOMEX, importers are automatically registered 
in the Registry of Exporters and Importers (REI) maintained by the Secretariat of Foreign Trade 
(SECEX) at the Ministry of Industry, Foreign Trade and Services (MDIC). Inscription in the REI is 
free of charge and with unlimited validity, but may be suspended (for up to two years) or cancelled 
as a sanction for import -related fraud.6 Import transactions w ith payment terms exceeding 
360 days remain subject to registration with the Central Bank.7  
3.4.  All services and intangible transactions between a Brazilian and a foreign resident must be 
registered in the Integrated System of Trade in Foreign Services, Intangible Assets and Other 
Operations (SISCOSERV), whose gradual implementation was completed i n October 2013.8 The 
reporting requirement applies to the buyer or seller (provider) resident in Brazil. Penalties for 
non-compliance include fines and the withdrawal of fiscal concessions awarded for the respective 
transactions.9 Legal entities under the simplified ( simples nacional ) tax regime, individual 
micro -entrepreneurs, and natural persons without for -profit economic activity (monthly turnover 
not exceeding US$30,000) qualify for an exemption, as long as they have not engaged in 
transactions benefit ting from public support for foreign trade.10 According to the authorities, 
SISCOSERV is maintained for statistics collection purposes; registration in the system is neither a 
prerequisite for the transaction's execution nor a means of imposing any restrict ions.11  
                                                
1 Exemptions include goods declared with a simplified import declaration or an express shipment 
declaration (DIRE) . 
2 Express accreditation may be granted to publicly traded companies, companies with the stat us of an 
authorized economic operator, state -controlled companies, and government agencies.  
3 RFB Normative Instruction No. 1,603 of 15 December 2015 an d Ordinance No. 123 of 
17 December  2015.  
4 In principle, the methodology and the time -frame  for assessm ent of applica tions are identical for all 
accreditation types . The analysis is based on the applicant' s turnover over a five-year period . 
5 RFB Normative Instruction No. 1,603, Art. 21 . 
6 MDIC Ordinance No. 249 of 21 December 2010 . 
7 Central Bank of Brazil  Circular  No. 3,691 of 16 December 2013.  
8 Law No. 12,546 of 14 December 2011 and joint RFB/SCS Ordinance No. 1,908 of 19 July 2012.  
9 SISCOSERV o nline information. Viewed at: http://www.siscoserv.srv.br/multas -e-penalidades -
siscoserv . 
10 MDIC Ordinance No. 113 of 17 May 2012 and its subsequent amendments.  
11 Transactions may be registered in SISCOSERV, without incurring a penalty, by the last working day of 
the third month following commencement of supply . The reporting may be done either  online or offline  and is 
free of charge . WT/TPR/S/358 • Brazil  
 
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  3.5.  Engaging the services of a customs broker is not a prerequisite for the fulfilment of Brazilian 
customs formalities. Apart from a Brazilian citizenship requirement, there are no regulatory 
restrictions to competition among customs brokers in Brazil . Both the customs brokers and their 
clients must obtain accreditation to use SISCOMEX. Customs brokers must also be registered in 
the Customs Register.  
3.6.  Each import declaration (ID) registered in SISCOMEX is subject to a fee of R$185; additional 
fees, ran ging from R$29.5 0 (first two items) to R$2.95  (item 51 and more), are payable for each 
item listed on the ID.12 As from December 2014, supporting documentation must be digitally 
signed and submitted electronically through SISCOMEX.13 Most online systems that  facilitate the 
fulfilment of formalities related to foreign trade, including SISCOMEX and SISCOSERV, require a 
digital certificate compliant with the Brazilian Public Key Infrastructure (ICP -Brazil).  
3.7.  Brazil ratified the WTO Trade Facilitation  Agreement (T FA) on 29 March 2016. Brazil's  
National Committee on Trade Facilitation (Confac) , comprising a broad range of public and private 
sector representatives, was established in 2016.14 Co-chaired by the MDIC  and the Ministry of 
Finance , Confac has a mandate to coordinate  TFA implementation activities and other trade 
facilitating measures . In March 2017 , Brazil notified  its enquiry point to the WTO and updated its 
notification of category  commitments , designating all but three  of the provisions contained in 
Sectio n I of the TFA  under Category A .15 The three remaining provisions, all designated as 
Category B commitments , have indicative implementation time -frames that do not go beyond 
end-2019. Brazil has al ready  put in place mechanisms that are partially compliant w ith the 
provisions on facilitation measures for authorized operators16 and pre -arrival processing.17  
3.8.  In 2014, Brazil established an authorized economic operator (AEO) programme, which 
replaced the pre -existing "blue line" express clearance facility .18 Partic ipation in the AEO 
programme is voluntary and is open to international supply chain participants with low -risk 
operations, both in terms of their cargo's physical security and of compliance with customs 
requirements. Depending on the type of AEO certificat ion, participants' benefits may include: a 
dedicated communication channel with the RFB; a lower rate of document and physical inspections 
on importation and/or exportation; expedited clearance at ports of entry; a 40 -day deadline for 
the provision of adva nce rulings; and simplified accreditation ( habilitação ) for access to SISCOMEX  
and special customs regimes and/or zones. At 31 January 2017 , the RFB had received 
343 applications for AEO certifications, of which 95 were approved  and 205 were refused . The 
authorities' aim is that AEOs would account for 50% of all registered import and export 
declarations by 2019.19 Brazil has concluded a mutual recognition agreement on AEO programmes 
with Uruguay and is developing joint work programmes to this end with Argent ina and  the 
United  States.  Exploratory talks on the mutual recognition o f AEO programmes are also underway 
with several trading partners, including Mexico, the Republic of Korea  and the Russian Federation . 
3.9.  IDs are processed according to a risk assessment m ethod that provides for four channels: 
green (automatic clearance), yellow (documentary inspection), red (documentary and physical 
inspection), and grey (documentary, physical and fraud -related inspection). The risk analysis 
factors are regularly updated a nd include: the importer's fiscal compliance record; operational and 
financial capacity; frequency of use of SISCOMEX; the nature, volume, and value of imports; 
taxation value; country of origin; and the import regime. In 2015, the authorities introduced 
machine learning and artificial intelligence methodologies for targeting and selecting high -risk 
shipments.  During the review period, the share of IDs processed through the yellow channel 
decreased steadily, whereas those of the green and red channels incre ased (Table  3.1).  
                                                
12 RFB Normative Instruction No. 1,158 of 24 May 2011.  
13 Normative Instruction No. 680 of 2 October 2006, as amended by RFB Normative Instruction 
No. 1,532 of 19 December 2014.  
14 Presidential Decree No. 8,807 of 12 July 2016 and CAMEX Resolution No. 122 of 23 November 2016.  
15 WTO document s G/TFA/N/BRA/1  and 2,  17 March 2017 . 
16 SRF Normative Instruction No. 476 of 13 December 2004, replaced by RFB Normative Instr uction 
No. 1,598 of 9 December 2015.  
17 RFB Normative Instruction No. 680 of 2 October 2006 and its subsequent amendments.  
18 RFB Normative Instruction No. 1,521 of 4 December 2014 , replaced by RFB Normative Instruction 
No. 1,598 of 9 December 2015.  
19 RFB on line information. Viewed at: 
http://idg.receita.fazenda.gov.br/orientacao/aduaneira/importacao -e-exportacao/oea  [08 December 2016].  WT/TPR/S/358 • Brazil  
 
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  Table 3.1 Distribution of IDs by risk assessment channel , 2013 -16 
 2013  2014  2015  2016  
Total IDs  2,547,190  2,491,676  2,221,295  2,063,073  
 (%) 
Green  88.8 88.9 90.8 91.8 
Yellow  7.6 7.2 5.1 3.9 
Red 3.6 3.8 3.9 4.2 
Grey 0.1 0.1 0.1 0.1 
Source:  RFB. 
3.10.   Importers may use a simplified import declaration (SID) for certain shipments whose value 
does not exceed US$3,000 and for some non -commercial imports.20 SID process ing is done 
through SISCOMEX f ree of charge.  
3.11.   Airborne expedited shipments (valued at US$3,000 or less) are declared with an express 
shipment declaration ( Declaração de Importação de Remessas Expressas  (DIRE)), which must be 
registered in the system for Computerized Control of Expedite d 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 cu stoms value, regardless of the tariff line under which they are 
classified; books, newspapers, and magazines are tax -exempt.  
3.12.   Brazil maintains a unified taxation regime (RTU) allowing for the simplified customs 
clearance of certain goods imported from Para guay by Brazilian micro -companies (with annual 
revenues up to R$120,000) and transported by authorized vehicles and drivers.21 The regime 
requires both the importer and the Paraguayan seller to be authorized and registered in a 
computerized system ( Sistema RTU) maintained by the RFB.22 Eligible imports comprise mainly 
consumer electronics (some 250 items under NCM tariff chapters 84, 85 and 90), subject to annual 
and quarterly value limits.23 Under the RTU, the cumulative rate of the import duty, the excise 
duty (imposto sobre produtos industrializados ), and PIS and COFINS  (Section 3.1.4)  contributions 
is 25%; it is applied on the goods' purchase price, as per the commercial invoice. According to the 
authorities, statistics on participation in the RTU are not a vailable.  
3.13.   The 2017 World Bank Doing Business  survey  estimates that importing merchandise into 
Brazil requires 63 hours and US$970 for "border compliance", and 120 hours and US$107 for 
"documentary compliance". On exportation, the corresponding figures are 49 hours and US$959, 
and 18 hours and US$226 , respectively. The report , albeit limited to the  two largest Brazilian 
business hubs, notes that trading across borders was made easier by electronic system 
improvements in the past two years.24  
3.14.   According to the  authorities, the average customs clearance time across all Brazilian 
customs posts  was 40.32 hours in 2013, 39 .35 hours in 2014, 35.29 hours in 2015, and 
34.16 hours in 2016. Besides reflecting more comprehensive sampling, these statistics differ from 
the World Bank figures in the nature of clearance procedures taken into account . 
                                                
20 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 (valued up to US$10,000) 
imported by an individual for non -commercial purposes; temporarily admitted vehi cles of foreign residents; 
imports by diplomatic missions; human organs and tissues for transplantation; domestic animals imported for 
non-commercial purposes; donations and goods admitted temporarily for humanitarian aid purposes; goods of 
a cultural natu re; goods (valued up to US$500) imported by a public administration entity; and goods returned 
to Brazil.  
21 Law No. 11,898 of 8 January 2009 and Decree No. 6,956 of 9 September 2009.  
22 The authorization requirements are set out in RFB Ordinance No. 1,245 of 30 January 2012.  
23 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. The list of eligible goods is available 
at: http://idg.receita.fazenda.gov.br/orientacao/aduaneira/manuais/rtu -regime -de-tributacao -
unificada/topicos/arquivos/anexou nicodecreto6956_2009.doc . 
24 Data in Doing Business 2017  are current as of 1 June 2016. For Brazil's country profile, as well as 
notes on the methodology and its limitations, see: 
http://www.doingbusiness.org/~/media/wbg/doingbusiness/documents/profiles/country/bra.pdf . WT/TPR/S/358 • Brazil  
 
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  3.15.   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 insta nce. 
Dispute settlement procedures may be carried out entirely by electron ic means. Statistics on 
disputes are not available due to the lack of a centralized registry.  
3.16.   Brazil has customs cooperation agreements with Angola, Argentina, the Plurinational Stat e 
of 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, South Africa, Spain, Uruguay, the United States, 
and the Bolivarian Republic of  Venezuela. Additionally, Brazil has bilateral agreements on customs 
issues with France, India, Israel, the Netherlands, the Russia n Federation, South Africa, the 
United  Kingdom, and the United States.  
3.17.   The dutiable value of imported goods is the sum of the purchase cost and all expenses 
incurred for freight and insurance (if any) up to the point of entry into Brazil.25 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 respecti ve 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 P rocessing 
Equipment since 1 March 1998.26 
3.18.   The share of IDs cleared using the transaction value method  was 99.87%  in 2013, 99.89%  
in 2014, 99.66%  in 2015 and 99.56%  in 2016 . 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.  
3.1.2   Rules of origin  
3.19.   Brazil applies rules of origin for non -preferential purposes.27 To be considered as originating, 
products mu st be wholly obtained or have undergone substantial transformation (becoming 
classifiable under a different four -digit tariff heading) in the declared country of origin. 
Verifications of non -preferential origin may be  carried out by SECEX at the import lic ensing stage , 
on the basis of a risk assessment. In 2015, the verification procedure was modified with a view to, 
inter alia, reducing the time -frame for conducting investigations.28 False declarations of origin may 
trigger rejection of an import licence ap plication and refusal to grant such licences for similar 
goods traced to the same exporter.  
3.20.   Preferential rules of origin are applie d in the context of Brazil's  trade agreements 
(Section  2.6.2). Eligibility for preferential tariff treatment must be attested  by a certificate of origin 
for each shipment of the merchandise in question. In addition, some of the trade agreements to 
which Brazil is a party (e.g. MERCOSUR -Israel ) have provisions requiring a certificate of 
non-manipulation in case of transit  or transhipment.   
3.21.   Compliance with  non-preferential and preferential  rules of origin is ascertained by  the RFB 
during customs clearance and post -clearance audits.29 The authorities have indicated that an 
updated regulation on the verification of origin by the RFB  would be issued in the near future.30 
Having implemented the electronic submission of supporting documentation to the RFB in 
December 2014  (Section  3.1.1), Brazil launched a pilot project for the bilateral exchange of 
digitally signed certificates of origin with Argentina in October 2016.  The authorities plan to 
implement similar projects in bilateral trade with Chile and Uruguay in 2017.  
                                                
25 According to the authorities, import insurance is not compulsory.  
26 WTO document G/VAL/N/3/BRA/1 , 23 October 2002.  
27 WTO document G/R O/N/78 , 16 April 2012 . 
28 SECEX Ordinance No. 38 of 18 May 2015  revoking SECEX Ordinance No. 3 9 of 11 November 2011 . 
29 SRF Normative Instruction No. 149 of 27 March 2002. 
30 Public consultations on the matter took place in January 2016. RFB online informatio n. Viewed at: 
http://idg.receita.fazenda.gov.br/sobre/consultas -publicas -e-editoriais/consul ta-publica/arquivos -e-
imagens/consulta -publica -rfb-no-01-2016.pdf/view  [4 April 2017].  WT/TPR/S/358 • Brazil  
 
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  3.22.   Imports without proof of origin are liable to a fine of 30% of their customs  value; those 
subject to a quantitative restri ction will not be admitted into Brazil and will be liable to a fine 
of R$5,000 per day, counted from the date of registration of the ID until the date of their effective 
return abroad. Non-compliance with preferential rules of origin  would result in the co llection of the 
relevant import duties and the suspension of preferential treatment until the exporter  provides 
satisfactory proof of a compliant productive process . 
3.23.   A revision of MERCOSUR rules of origin was negotiated in November 2011 and  entered into 
force on 27 June 2015.31 In general, MERCOSUR origin is conferred on products that: (i) are wholly 
obtained or produced in MERCOSUR; (ii) have become classifiable under a four -digit tariff heading 
that differs from those of all non -originating inputs32; or (ii i) have minimum MERCOSUR content of 
60% of their f.o.b. value.33, 34 Specific rules of origin, overriding the general ones, apply to some 
2,123 tariff lines at the eight-digit level . The goods concerned include foodstuffs, pharmaceuticals, 
textiles, steel, t elecommunications, and informatics products. MERCOSUR rules of origin may be 
applied to all intra -MERCOSUR trade up to 31 December 2023 .35 Brazil's Economic 
Complementarity Agreements with Argentina (ACE -14) and Uruguay (ACE -02) stipulate special 
rules of o rigin for products of the automotive industry until the effective entry into force of the 
MERCOSUR Automotive Policy.36  
3.24.   LAIA agreements also stipulate general and specific rules of origin.37 Under general LAIA 
rules, origin is conferred on products that eit her: (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.38 
3.1.3   Tariffs  
3.1.3.1   Applied MFN tariff 
3.25.   All trading partners of Brazil receive at least most -favoured -nation (MFN) tariff treatment. 
Brazil applies the MERCOSUR Common External Tariff (CET) expressed in t he Common MERCOSUR 
Nomenclature (NCM), which is currently based on the 201 7 version of the Harmonized 
System  (HS).  
3.26.   Brazil's 2017 applied MFN tariff is entirely ad valorem  and has 10,226  lines at the eight -digit 
level (Table  3.2). The tariff comprises 1 9 bands, with rates ranging from zero to 55% (same as 
in 2012).39 Brazil does not apply any seasonal or variable import duties. The simple average 
applied MFN tariff declined slightly from 11.7% in 2012 to 11.6% in 201 7; for dutiable lines, the 
decline was fro m 12.7% to 12. 6%. Some 7. 7% of tariff lines are duty free (down from 8% 
in 2012), the modal ra te is 1 4%, and 4. 6% of all lines have rates of over 26% (Chart  3.1). The 
manufacturing sector continues to benefit from the highest tariff protection , with the average 
applied tariff (under both HS25 -97 and ISIC definition s) remaining virtually the same as in 2012 .  
Table 3.2 Structure of the MFN tariff schedule, 2012 and 2017  
  2012  2017  
Total number of tariff lines  10,031  10,226  
Bound tariff lines (% of all tariff lines)  100.0  100.0  
Simple average rate  11.7 11.6 
                                                
31 Decree No. 8,454 of 20 May 2015.  
32 This rule is considered fulfilled as long as the combined c.i.f. value of non -originating inputs classified 
in the same tariff head ing as the final good does not exceed 10% of the latter's f.o.b. value.  
33 MERCOSUR's Economic Complementarity Agreements with the A ndean Community (ACE -59), 
Peru (ACE-58) and Bolivia  (ACE-36) contain provisions on cross -cumulation.  
34 Differential treatment  provisions allow lower MERCOSUR content thresholds for Paraguay until 2025, 
and Uruguay and Argentina until 2022 (Common Market Council Decision No. 32 of 16 July 2015).  
35 Common Market Council Decision No. 31/15 of 16 July 2015. 
36 Decrees No. 6,500 of 2 July 2008 and No. 6,518 of 30 July 2008.  
37 For the rules of origin for LAIA agreements to which Brazil is a party, see LAIA online information. 
Viewed at: http://www.aladi.org /nsfaladi/r%C3%A9gorigtext.nsf/vpaises/brasil . 
38 LAIA Resolution No. 252 of 4 August 1999. Viewed at: 
http://www.aladi.org/nsfaladi/juridica.nsf/vres252web/res252 . 
39 Unlike the 2 012 tariff, the highest import duty rate is currently applied on desiccated coconuts . WT/TPR/S/358 • Brazil  
 
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    2012  2017  
HS 01 -24 10.3 10.3 
HS 25 -97 11.9 11.8 
WTO agricultural products  10.2 10.2 
WTO non -agricultural products  11.9 11.8 
Duty-free tariff lines (% of all tar iff lines)  8.0 7.7 
Simple average of dutiable lines only  12.7 12.6 
Tariff quotas (% of all tariff lines)a 0.3 0.4 
Non-ad valorem  tariffs (% of all tariff lines)  0.0 0.0 
Domestic tariff "peaks" (% of all tariff lines)b 0.02 4.5 
International tariff "pe aks" (% of all tariff lines)c 27.7 27.0 
Nuisance applied rates (% of all tariff lines)d 18.1 18.2 
Coefficient of variation  0.7 0.7 
a Including tariff quotas applied to a subset of a tariff line and/or for a period shorter than 12 months.  
b Domestic tari ff peaks are defined as those exceeding three times the overall simple average applied 
rate. There were only two such peaks in 2012, as temporary rate increases on some 100 lines had 
raised the overall average.  
c International tariff peaks are defined as t hose exceeding 15%.  
d Nuisance rates are those greater than zero, but less than or equal to 2%.  
Source:  WTO Secretariat calculations, based on data provided by the Brazilian authorities.  
Chart 3.1 Frequency di stribution of MFN tariff rates, 2017  
(7.7%)(18.2%)
(2.2%) (2.4%)(3.1%)(10.6)
(7.9%)(20.8%)
(7.7%)(8.0%)
(3.0%)
(0.04%)(3.8%)(4.6%)
0%10%20%30%40%50%60%70%80%90%100%
02505007501,0001,2501,5001,7502,0002,2502,500
Duty
free2.0% 4.0% 6.0% 8.0% 10.0% 12.0% 14.0% 16.0% 18.0% 20.0% 25.0% 26.0% >26%Chart 3.[TAR]  Frequency distribution of MFN tariff rates, 2017
Number of tariff lines
Cumulative %
Number of lines (% of total)
Source:  WTO Secretariat calculations, based data provided by the authorities.
 
Source:  WTO Secretariat calculations, based on data provided by the Brazilian authorities.  
3.27.   In aggregate, the tariff continues to depict positive escalation  for manufacture d goods : fully 
processed products attract the highest average applied rate, followed by semi -processed goods 
and raw materials ( Chart  3.2 and Table  3.3). This pattern of escalation tends to act as a 
disincentive to improve international competitiveness at the higher stages of value addition. The 
autho rities note that any pattern -of-escalation assessment is fraught with methodological 
difficulties and therefore debatable.  
3.28.   In line with MERCOSUR rules, Brazil maintains a range of temporary , individual derogations 
from the CET. Three MERCOSUR mechanisms al lowing for such derogations have a longstanding 
implementation record in Brazil: the basic list of national exemptions, the quotas for lower tariffs, 
and the Ex Tarifário  mechanism.40 
                                                
40 WTO document WT/TPR/S/212/Rev.1 , 11 May 2009.  WT/TPR/S/358 • Brazil  
 
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  Chart 3.2 Tariff escalatio n, by 2 -digit ISIC industry, 2017  
n.a.n.a.
0%5%10%15%20%25%30%35%
31 32 33 34 35 36 37 38 39 Total
manuf.Chart 3.Tariff escalation by 2 -digit ISIC industry, 2017
Average applied rate
in manufacturing
(12.0%)First stage of processing
Semi-processed
Fully processed
n.a.       Not applicable.31   Food , beverages and tobacco      
32   Textiles and leather  
33   Wood and furniture      37   Basic metals
38   Fabricated metal products and machinery
39   Other manufacturing34   Paper, printing and publishing
35   Chemicals
36   Non -metallic mineral products
Source:  WTO Secretariat calculations, based on data provided by the authorities.
 
n.a. Not applicable.  
Source:  WTO Secretariat calculations, based on data provided by the Brazilian authorities.  
Table 3.3 Summary analysis of Brazil's MFN tariff, 2017  
Descr iption  No. of 
lines  Average  Range  Variation  Duty -free 
(%) (%) (CV)  (%) 
Total  10,226  11.6 0-55 0.7 7.7 
HS 01 -24 1,304  10.3 0-55 0.5 8.1 
HS 25 -97 8,922  11.8 0-35 0.7 7.7 
By WTO category            
WTO agricultural products  1,047  10.2 0-55 0.6 8.6 
Animals and products thereof  133 7.9 0-16 0.6 9.0 
Dairy products  37 18.6 12-28 0.3 0.0 
Fruit, vegetables, and plants  280 9.6 0-55 0.6 10.0 
Coffee and tea  30 14.5 10-35 0.4 0.0 
Cereals and preparations  140 11.5 0-20 0.5 12.9 
Oil seeds, fats, oil and their  products  125 7.9 0-20 0.5 12.0 
Sugars and confectionary  23 16.7 16-20 0.1 0.0 
Beverages, spirits and tobacco  73 16.6 0-27 0.3 2.7 
Cotton  7 6.3 6-8 0.1 0.0 
Other agricultural products, n.e.s.  199 7.9 0-14 0.5 7.5 
WTO non -agricultural products  9,179  11.8 0-35 0.7 7.6 
Fish and fishery products  366 10.1 0-32 0.3 4.4 
Minerals and metals  1,218  9.9 0-25 0.6 7.3 
Chemicals and photographic supplies  3,212  7.1 0-20 0.8 2.9 
Wood, pulp, paper and furniture  406 10.5 0-18 0.5 2.5 
Textiles  832 22.6 2-35 0.3 0.0 
Clothing  251 35.0 35-35 0.0 0.0 
Leather, rubber, footwear and travel goods  234 15.2 0-35 0.6 0.4 
Non-electric machinery  1,132  11.6 0-30 0.5 18.3 
Electric machinery  606 12.1 0-25 0.6 20.6 
Transport equipment  216 19.0 0-35 0.6 13.0 
Non-agricultural pr oducts, n.e.s.  679 13.9 0-35 0.5 15.8 
Petroleum  27 1.0 0-20 4.1 92.6 
By ISIC sectora           
Agriculture, hunting and fishing  527 7.3 0-55 0.7 15.2 
Mining  127 3.1 0-10 0.6 13.4 
Manufacturing  9,571  12.0 0-35 0.7 7.3 
Manufacturing excluding food proc essing  8,748  12.0 0-35 0.7 7.6 
By stage of processing            
First stage of processing  1,046  7.1 0-55 0.7 13.0 
Semi-processed products  3,879  9.5 0-26 0.8 1.7 
Fully processed products  5,301  14.0 0-35 0.6 11.1 WT/TPR/S/358 • Brazil  
 
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  Descr iption  No. of 
lines  Average  Range  Variation  Duty -free 
(%) (%) (CV)  (%) 
By HS section            
01 Live animals  and products  515 9.3 0-28 0.5 7.3 
02 Vegetable products  404 8.0 0-55 0.5 17.3 
03 Fats and oils  74 9.6 4-20 0.2 0.0 
04 Prepared food, etc.  311 15.1 0-35 0.3 0.0 
05 Minerals  207 2.5 0-20 0.8 33.3 
06 Chemical s and products  thereof  3,020  6.8 0-20 0.8 3.4 
07 Plastics and rubber  424 11.4 0-35 0.5 0.9 
08 Hides and skins  113 11.5 2-35 0.6 0.0 
09 Wood and articles  157 7.9 2-14 0.5 0.0 
10 Pulp, paper , etc. 222 11.3 0-16 0.5 4.5 
11 Textile s and articles  1,055  25.4 2-35 0.3 0.0 
12 Footwear, headgear  70 25.4 16-35 0.3 0.0 
13 Articles of stone  217 10.8 0-25 0.4 0.9 
14 Precious stones, etc.  64 9.6 0-18 0.6 9.4 
15 Base metals and products  739 11.9 0-25 0.4 1.6 
16 Machinery  1,765  11.8 0-30 0.5 16.7 
17 Transport equipment  229 18.5 0-35 0.6 14.9 
18 Precision equipment  450 12.3 0-20 0.5 18.6 
19 Arms and ammunition  18 20.0 20-20 0.0 0.0 
20 Miscellaneous manufacture d articles  165 19.1 0-35 0.3 2.5 
21 Works of art, etc.  7 4.0 4-4 0.0 0.0 
a ISIC (Rev.2) classification, excluding electricity (1 line).  
Source:  WTO Secretariat calculations , based on data provided by the Brazilian authorities.  
3.29.   To mitigate any difficulties stemming from the entry into force of the CET, MERCOSUR 
members may individually apply different (higher or lower) tariff rates on up to 100 lines . 
Modifications to the so -called basic list of national exemptions may not exceed 20% of all listed 
lines within a six -month period. As at  end-February  2017, Brazil's derogations under that 
mechanism concerned 99 NCM lines.41 The deadline for the eliminatio n of Brazil's basic list of 
national exemptions has been extended until 31 December 2021.42 
3.30.   With a view to fostering supply -side innovation and competitiveness, the Ex Tarifário  
mechanism allows MERCOSUR members to individually reduce import duties on pre -determined 
lists of capital goods (BK list) and informatics and telecommunications equipment (BIT list) without 
a domestically produced equivalent. Typically, rates are reduced to 2% for up to two years. Brazil 
has been authorized to maintain its BK and BIT  lists until end -2021.43 Besides the lack of 
equivalent domestic production, Brazilian decisions on the granting of import duty reductions take 
into account other considerations, such as adoption of new technologies, investment in 
infrastructure improvement s, and complexity of the imported good . In February 2017 , Brazil's 
Ex Tarifário  derogations from the CET comprised 78 tariff lines relating to its BIT list  and 537 tariff 
lines relating to its BK list .  
3.31.   As a means of addressing shortages within the common market, MERCOSUR members may 
individually apply tariff quotas (with an in -quota rate of 2% or, exceptionally, zero) on up to 
45 tariff lines at a time for up to 24 months (renewable for up to 12 additional months).44 These 
tariff quota s may also be specifie d in Ex Tarifário  format ( i.e. as a subset of the tariff line). The 
quantitative restriction, in -quota rate, and duration of application are determined by MERCOSUR's 
Commerce Commission after consultation with all member states.45 As at end-January  2017, Brazil 
maintained 26 tariff quotas ( up from 25 in 2011), including 3 with in -quota rates set at zero.  
3.32.   Between 1 October 2012 and 30 September 2013 , Brazil also applied higher -than-CET rates 
on 100 tariff lines  under a temporary MERCOSUR mechanism intended t o address trade 
                                                
41 Online information. Viewed at: http://www.mdic.gov.br/comercio -exterior/estatisticas -de-comercio -
exterior -9/arquivos -atuais  [9 April 2017 ]. 
42 Common Market Council Decision No. 26/15 of 16 July 2015.  
43 CAMEX Resolution No. 92 of 24 September 2015 implementing Common Market Council Decision 
No. 25/15 of 16 July 2015.  
44 Depending on the nature of the supply shortage, the simultaneous application of tariff quotas may be 
capped at 30 and/or  15 tariff lines.  
45 MERCOSUR Resolution GMC No. 08/08 of 20 June 2008.  WT/TPR/S/358 • Brazil  
 
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  imbalances due to the international economic environment.46 The tariff hikes ranged from 6 to 
23 percentage points, causing the simple average rate across the concerned lines to increase from 
13.5% to 22.2% . In 2015, the Common Market Counci l of MERCOSUR reinstated this mechanism 
until 31 December 2021  but Brazil has not used  it to date.47 
3.1.3.2   Bindings  
3.33.   Brazil bound its entire tariff during the Uruguay Round. Tariffs on agricultural products 
(WTO definition) are bound at rates ranging from zero to 55%, with the higher bindings reserved 
mostly for dairy products, grains, and tobacco. Bound rates for non -agricultural products range 
from zero to 35%. The average bound tariff rate is 30.1%, some 18.5 percentage points  higher 
than the average applied MFN  rate (Chart  3.3).48 Brazil has bound "other duties and charges" for 
only one line, covering certain navigational instruments (HS 9014.80.0400 at 15%); this duty is 
not applied in practice.  
Chart 3.3 Average ap plied and bound tariff rates, by HS section, 2017  
0%5%10%15%20%25%30%35%40%
010203040506070809101112131415161718192021MFN 2017
Final bound
Average MFN 2017
Average final boundChart 3. Average applied MFN and bound tariff rates, by HS section, 2017
01   Live animals & products        
02   Vegetable products
03   Fats & oils      
04   Prepared food, etc.
05   Mineral products
06   Chemicals & products07   Plastic & rubber
08   Hides & skins
09   Wood & articles
10   Pulp, paper, etc.
11   Textiles & articles
12   Footwear, headgear13   Articles of stones
14   Precious stones, etc.
15   Base metals & products
16   Machinery
17   Transport equipment
18   Precision instrument19   Arms & ammunition
20   Miscellaneous manufacturing
21   Works of art, etc.
Source:  WTO Secretariat calculations, based on data received by the authorities.
 
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.34.   The WTO process of certifying Brazil's bound tariff schedule in order to incorporate the 
changes resulting from the introdu ction of HS versions 2007, 2012 and 2017 has not yet been 
completed. Applied rates on some 134 tariff lines (up from 120 in 2012) 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.  
3.1.3.3   Preferences  
3.35.   Brazil grants tariff preferences under bilateral and regional trade agreements, which may 
overlap in terms of trading partners but differ in terms of product coverage and rules of 
origin (Chart  3.4 and Table  2.2). In 2017,  Brazil applied preferential tariff rate  quotas  under five 
such agreements: Brazil –Guyana (AAP.A25TM -38), Brazil –Suriname (AAP.A25TM -41), 
Brazil -Mexico (ACE-53), MERCOSUR –Mexico  (ACE-55) and MERCOSUR -Andean Countrie s 
(ACE-59). According to the authorities, the share of aggregate preferential imports in the total 
                                                
46 CAMEX Reso lution No. 70/12 of 28 September 2012 implementing Common Market Council Decision 
No. 39/11 of 20 December 2011.  
47 Common Market Council Decision No. 27/15 of 16 July 2015. 
48 Tariff bindings are available in the HS2002 nomenclature, whereas the 2017 appli ed tariff is 
expressed in HS2017. In the absence of a common nomenclature version, these two averages are not strictly 
comparable.  WT/TPR/S/358 • Brazil  
 
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  value of Brazil's imports  was some 14.5% in 2013, 13.6% in 2014, 12.9% in 2015, and 13.7% 
in 2016. Annual data on the associated forgone tariff revenue were not made available.  
Chart 3.4 Product coverage of selected preferential agreements, 2016  
0% 20% 40% 60% 80% 100%Mercosur - SACU (2007)Mercosur - Cuba (2002)Mercosur - Mexico (2002)Mercosur - Israel (2002)Mercosur - India (2002)GSTP (2002)Mercosur - Venezuela (1996)Mercosur - Ecuador (1996)Mercosur - Colombia (1996)Mercosur - Peru (1996)Mercosur - Bolivia (1996)Mercosur - Chile (1996)Brazil -Mexico (1996)Brazil - Saint Kitts & Nevis (1996)Brazil - Guyana (1996)
Preferential tariff rate (0%) Preferential tariff rate (>0%) No preferential rates (applied MFN rate)
Note:  Figures in brackets refer to the HS nomenclature in which the preferential schedules are provided and on 
which the calculations are based on.  Coverage of selected p referential agreements in 2016
Source:   WTO calculations, based on data provided by the authorities.
 
Note:  Figures in brackets refer to the HS nomenclature in which the preferential schedules are provided 
and on which t he calculations are based.   
Source:  WTO Secretariat calculations, based on data provided by the authorities.  
3.36.   Most of the preferential tariff schedules applied by Brazil have been set out in the LAIA 
nomenclature with a view to facilitating successive negot iations on regional economic integration. 
Brazil has not published formal  correspondence tables between its preferential schedules and its 
applied tariff, which is regularly migrated to the latest version of the HS nomenclature.  The lack of 
a common nomenc lature version precludes meaningful comparisons both across preferential 
agreements and against the currently applied MFN tariff.49 Consequently, traders incur onerous 
transaction costs as they have to research one nomenclature for tariff classification pur poses and 
at least one additional nomenclature for preference eligibility  purposes. According to the 
authorities, the burden on most importers would be limited by the fact that they would need to 
research nomenclatures for just a few products. The completi on of some agreements' transition 
period s in the coming years is also expected to reduce such transaction costs.  
3.1.4   Other charges affecting imports  
3.37.   Brazil's internal taxation regime remains overly complex, including in the treatment of 
imported goods and serv ices. Domestic and cross -border transactions  are subject to various 
federal and sub -federal levies, including: Tax on Industrial Products (IPI); Tax on the Circulation of 
Goods and Services (ICMS); contributions to the social integration programme (PIS) an d to finance 
social security (COFINS); and Tax on Services (ISS). The cross -cumulation of these taxes for tax 
base purposes is not uncommon. In addition, their application typically varies depending on the 
product type, the competent sub -federal authority,  and the importer's tax regime status.  
3.38.   Depending on their nature, c ertain transactions  (including cross -border ones) may also be 
subject to other charges, such as the Additional Freight Charge for the Renovation of the Merchant 
Navy (AFRMM), the Financial  Transactions Tax (IOF), and the Contribution for Intervention in the 
Economic Domain (CIDE) (Section  4). One other tax, the Additional Airport Tax (ATAERO) , was 
eliminated as from  January 2017.50  
3.39.   During the period under review, duties and other taxes on f oreign trade transactions 
accounted for less than 1 5% of federal tax revenue, the largest contribution s being attributable to 
                                                
49 Notably, it is difficult to detect the erosion of preferences granted under certain agreements due to 
subsequent lowering o f MFN tariffs.  
50 Law 13,319 of 25 July 2016 . WT/TPR/S/358 • Brazil  
 
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  COFINS  and import duties  (Table  3.4). Although statistics on ICMS collection are not compiled at 
the federal level, the authoritie s affirm that this tax remain s the main source of revenue  for most 
Brazilian federative states.   
Table 3.4 Federal tax revenue, by main sources, 2012 -16 
(R$ million  and % ) 
 2012  2013  2014  2015  2016  
Total  689,768  768,724  788,924  826,844  883,289  
 (%) 
Import duties  4.51 4.84 4.67 4.72 3.56 
Export duties  0.01 0.02 0.02 0.005  0.003  
IPI – local sales  4.34 4.15 4.50 3.92 3.56 
IPI – importation  2.31 1.98 1.93 2.03 1.52 
Income taxes  38.29  37.41  38.59  38.96  41.26 
IOF 4.46 3.83 3.77 4.20 3.81 
Rural territorial tax  0.10 0.11 0.12 0.14 0.14 
COFINS – domestic  20.20  19.79  20.50  19.85  19.49  
COFINS – importation  5.10 5.00 4.16 4.54 3.65 
PIS – domestic  5.62 5.50 5.73 5.57 5.41 
PIS – importation  1.08 1.03 0.85 0.93 0.75 
Social contribution on net profit (CSLL)  8.34 8.21 8.31 7.42 7.69 
CIDE 0.40 0.005  0.002  0.40 0.65 
Other  5.23 8.14 6.84 7.31 8.51 
Source:  WTO Secretariat calculations, based on data from the RFB. 
3.40.   The IPI is a federal tax levied on domestically p roduced and imported manufactured goods, 
following the value -added principle.51 For domestic transactions, the tax is typically levied on the 
ex-factory value of a product upon its release from the manufacturing facility.52 The IPI levied on 
imports 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 zero to 20% range, but may be higher for certain 
products, such as perfumes (42%), alcoholic beverages (60%), or cigarettes (300%). In some 
cases, IPI rates are non -ad valorem .53 During 2013 -16, most amendments to the IPI concerned 
tax rates.54 In principle, the same rates apply on domestically produced and imported goods. 
However, certain IPI reductions or suspensions, such as on automo tive products ( Section  4.3.5), 
have been granted only to products originating in some of Brazil's preferential trading partners 
(e.g., MERCOSUR and Mexico).  
3.41.   The ICMS is a value -added tax levied on imports, intrastate and interstate transactions 
involving merchandise, inter -municipal and interstate transportation services, and communication 
services.55 Taxable merchandise transactions are those involving a change of ownership, as well as 
transfers between a company's affiliates/branches, and importation (inc luding for own use or 
consumption).56 Being in the competence of Brazil's federative states, the I CMS is governed by 
27 distinct regulatory regimes and certain overarching disciplines established at the federal level . 
The ICMS on interstate transactions is collected at origin and a portion of that amount is 
subsequently transferred to the destination state , giving rise to complex scenarios whenever the 
two states apply different ICMS rates.   
3.42.   The taxable base , the applicable ICMS rate and any interstate trans fers depend on several 
factors, including the ship -from and ship -to tax jurisdiction, the purchaser's tax status, and the 
                                                
51 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.  
52 Each individual facility of a company is considered a separate taxpayer.  
53 The latest update of the I PI tax rates table ( Tabela de incidência do IPI (TIPI)) dates from 
16 February  2016. Viewed at: http://idg.receita.fazenda.gov.br/acesso -rapido/legislacao/ documentos -e-
arquivos/tipi  [15 December 2016].  
54 A list of legislative amendments is available at: http://www.planalto.gov.br/ccivil_03/_ato2011 -
2014/2011/decreto/d76 60.htm  [15 December 2016].  
55 Unlike intrastate and interstate transactions , imports of electricity are also subject to ICMS  
(Section  4.4.4) .  
56 If the purchaser is not an ICMS taxpayer and subsequent sales are not subject to this tax, the ICMS 
paid on inp uts is not recoverable as a credit.  WT/TPR/S/358 • Brazil  
 
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  product's type and intended use. Some companies, including those under federal and sub -federal 
(including municipal) ownership/control , are exempted from the ICMS. In addition, 
product -specific rates and/or (permanent or temporary) exemptions may apply for all states or 
within a single state. ICMS rate and/or tax base reductions may be granted within a state 
(Section  3.3.1.2 ).  
3.43.   In genera l, the ICMS is levied on the value of the transaction (including the cost of 
insurance and freight), net of unconditional discounts. The taxable base of imports comprises the 
c.i.f. value, the import duties, the IPI, the ICMS itself and any other taxes and /or customs -related 
charges.57 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 Espír ito Santo).58 As from January 2013, a uniform ICMS rate 
of 4% applies to transfers of credits between states arising from the ICMS on goods imported  via a 
state different from the state of final destination .59 Intrastate transactions and direct imports to 
the destination state  are subject to ICMS rates of 19% (Rio de Janeiro), 18% (São Paulo, Paraná, 
and Minas Gerais), or 17% (all remaining states).  
3.44.   The PIS and COFINS contributions are levied on a value -added (non -cascading) basis, at a 
combined rate of 9.25 % (1.65% for PIS and 7.6% for COFINS) of gross revenue, for companies 
paying corporate income tax under the actual profit method.60 In general, the same combined rate 
applies to goods and services, whether domestically supplied or imported. Merchandise impo rts are 
taxed on their c.i.f. value; for imported services, the base is the amount (before income tax) paid 
or remitted abroad augmented by a multiplier term comprising the rates of ISS, PIS and COFINS.61 
Higher rates apply to imports of soft drinks and bee r, machinery, motor vehicles and their parts, 
rubber tyres and air chambers, pharmaceuticals, and cosm etic products. In addition, 
non-ad valorem  rates are levied on  the importation of soft drink and beer containers, and fuels. 
Provisions for zero -rating or  exemption are in place for a wide range of goods.  
3.45.   The ISS is a municipal tax levied on a cumulative (cascading) basis on revenues derived 
from the provision of certain services (including from abroad). The relevant list of services and the 
maximum tax ra te (5% of the transaction value) are fixed by a federal law62; a minimum tax rate 
of 2% is stipulated in the Constitution.63 In general, services subject to the ISS are exempted from 
the ICMS even if the service transaction also involves the sale of goods; i n 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 contra cting entity that receives the service.  
3.46.   The federal government grants duty and tax concessions under various initiatives aimed at 
promoting investment and innovation or achieving social objectives. A range of tax breaks, 
including on imported goods and ser vices, are made available to companies established in export 
processing zones ( Section  3.2.4.2) and the Manaus Free Trade Zone ( Section  3.3.1.2 ). Sub -federal 
authorities also grant rebates on taxes that fall within their remit ( Section 3. 3.1). According to  RFB 
estimates and projections, import duty concessions result ed in forgone revenue in the range of 
R$3.4 –R$4.9 billion over the 201 3-17 period. Revenue losses on import -related IPI concessions 
were estimated at nearly the same magnitude ( Table 3.5 ).  
                                                
57 Details regarding the ICMS tax base for imports are available at: 
http://www4.receita.fazenda.gov.br/simulador/glossario.html#ncm  [18 Dece mber 2016].  
58 Subsequent compensation reflects ICMS rate differences between the ship -from and ship -to tax 
jurisdiction.   
59 Federal Senate Resolution No. 13 of 25 April 2012.  
60 Companies under the presumed profit (cumulative) tax system, as well as certai n revenues deriving 
from telecommunications, transport and software development services, are subject to a combined rate of 
3.65% (0.65% for PIS and 3% for COFINS), without any tax credits for the PIS and COFINS paid on inputs 
(services and material costs) . Companies with revenues subject to the presumed profit tax system and other 
revenues subject to the actual profit (non -cumulative) tax system must keep separate records of their 
contributions under each system.  
61 Prior to  October 2013, the tax base of me rchandise imports was the c.i.f. value augmented b y the 
ICMS, the PIS and COFINS. The calculation methodology currently in force for the PIS and COFINS on imports 
is set out in RFB Normative Instruction No.  1,401 of 9  October 2013.  
62 Complementary Law No. 116 of 31 July 2003.  
63 Constitutional Amendment No. 37 of 13 June 2002.  WT/TPR/S/358 • Brazil  
 
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  Table 3.5 Forgone federal tax revenue, 2013 -17 
(R$ billion)  
Tax heading  2013  2014a 2015a 2016a 2017a 
Import duties  3.48 3.68 4.29 4.94 3.51 
IPI –importation  3.17 3.60 4.12 4.62 3.40 
IPI – local sales  20.90  22.39 24.39  22.63  25.06  
COFINS  54.77  58.51  70.54  64.56  64.02  
PIS 10.87  11.64  14.10  12.89  12.72  
Income taxes  72.66  80.18  87.72  89.51  97.71  
IOF 2.12 1.98 2.50 5.14 2.87 
CSLL 9.04 9.30 10.49  11.17  11.79  
AFRMM  1.48 1.37 1.73 1.15 1.22 
Other  44.82  57.13  62.55 54.39  62.54  
a Projections . 
Source:  RFB, budget estimates ( Demonstrativo dos Gastos Tributários , Estimativas Bases Efetivas , 2013 ) 
and annual budget projections ( Demonstrativo dos Gastos Tributários, PLOA ). 
3.1.5   Import prohibitions, restrictions, and licensin g 
3.47.   In general, Brazil maintains import prohibitions on health and moral grounds, and to comply 
with international conventions to which it is a party. During the period under review, the Brazilian 
list of import prohibitions was expanded with the inclusion o f cigarette replicas intended f or the 
under -aged (Table 3.6 ).  
Table 3.6 Import prohibitions, 2017  
Product  Description  Legal basis  
Cigarette replicas 
intended for the under -
aged The importation, production, c ommercialization, 
distribution and propaganda of any products 
(and packaging) intended for the under -aged 
that replicate the shape of cigarettes (or the like) 
are prohibited  Law No. 12,921 of 26  December 2013  
Endangered animals and 
plants  Animals and plan ts listed as endangered by 
CITES  Decree No. 3,607 of 
21 September  2001 
Hazardous waste  Import ban; other movements must follow Basel 
Convention procedures  National Environment Council 
(Concelho Nacional do Meio Ambiente  
– CONAMA) Resolution No.  452 of 
2 July 2012  
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 weight, are prohibited  Ministry of Agriculture,  Livestock and 
Food Supply (MAPA) Normative 
Instruction No.  17 of 18  June 2004  
Illicit drugs  Substances and plants that may cause physical 
or psychological dependence  Secretariat for Health Surveilance 
(Secretaria de Vigilância em Saúde  - 
SVS)/Ministry of  Health ( Ministério da 
Saúde  - MS) Ordinance No. 344 of 
12 May 1998  
Programmed electronic 
machines for gambling  Prohibited on moral grounds  Law No. 37 of 18  November  1966 
Substances that deplete 
the ozone layer  Prohibited substances in accordance with th e 
Montreal Protocol  CONAMA Resolution No.  267 of 
11 December  2000 
Toys that replicate 
firearms  Imports and domestic production are prohibited  Article 26 of Law No.  10,826 of 
22 December  2003 
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  CONAM A Resolution No.  452 of 
2 July 2012 
Used consumer goodsa May only be imported by the State or educationa l 
and scientific institutions  Article 27 of MDIC Ordinance No. 235 
of 7 December 2006  
Weapons and 
ammunition  Private imports of goods intended for exclusive 
use by military or police forces  Decree No. 2,998 of 23  March 1999  
Wines  Prohibited if transporte d in containers of more 
than 5  litres Article 26 of Law No. 7,678 of 
8 November 1988  
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.  WT/TPR/S/358 • Brazil  
 
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  3.48.   Brazil submitted its most recent notifications64 to the C ommittee on Import Licensing 
in 2016; several follow -up questions have been raised by the EU.65  
3.49.   Brazil maintains automatic and non -automatic im port licensing requirements for numerous 
products, regardless of their origin .66 Import licences must be obtained prior to customs clearance; 
whenever non -automatic licensing requirements apply, importers are generally advised to obtain 
the licence before t he goods are shipped. Requests for both types of licences are submitted online 
through SISCOMEX and forwarded to one of the 16 competent government entities for 
processing.67 According to the authorities, there are no overlaps in the licensing entities' 
competences but the granting of some import licences may require intervention (approval)  by 
more than one entity. In addition, the main import licensing entity, SECEX's Department of Foreign 
Trade Operations (DECEX), has delegated its competences over certain  products and operations to 
Banco do Brasil S.A .68  
3.50.   In principle, all granted import licences are registered directly in SISCOMEX.  All import 
licences are non -transferrable and valid for 90  days. Refusal to grant a licence may be appealed 
before the relevan t licensing agency. Some entities may levy a fee for the import licence; 
according to the authorities, the fees reflect the cost of services rendered.  
3.51.   At end-2016, imports classifiable under some 137 tariff lines were subject to automatic 
licensing, wherea s non -automatic licensing requirements could  apply to at least 5,460 tariff lines 
(more than half of Brazil's entire tariff).69 During 2013-16, the main additions to the list of imports 
subject to non-automatic licensing  included endangered species  (some 200 tariff lines ) and several 
manufactured goods  (i.e. automotive parts) . According to the authorities, the implementation of 
the Single Window Programme  (Section  3.1.1) would bring about more efficient solutions for the 
enforce ment of  public policies , there by significantly reducing the number of import licensing 
requirements.  
3.52.   In general, automatic licensing is used for statistics collection, and monitoring of specific 
products and customs regimes, including the inward processing regimes . According to the 
authorities, the purpose of non -automatic licensing 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 quotas or trade remedies. The gran ting 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 substituted by a similar item currently produced in Brazil. Non -automatic 
licensing is also used in the administration of duty and tax concessions , whereby  imports must 
undergo  a "similarity examination"  to ascertain that no equivalent domestically produced goods 
exist.70 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.  
                                                
64 WTO documents G/LIC/N/1/BRA/7/ Corr.1, 6 September 2016;  G/LIC/N/2/BRA/7 , 31 August 2016;  
and G/LIC/N/3/BRA/11 , 31 August 2016 . 
65 WTO document G/LIC/Q/BRA/20 , 22 November 2016 . 
66 A compilation of import licensing regulations is available in Chapter II of SECEX Ordinance No. 23 
(14 July 2011) and its subsequent amendments . Up-to-date information on import licensing requirements is 
available  through a simulator module of SISCOMEX, viewed  at: 
https://siscomex.desenvolvimento.gov.br/tratamento/private/pages/consulta_tratamento.jsf  
[29 December  2016].  
67 Requests for automatic licensing mu st be processed within 10 business days, whereas those for 
non-automatic licensing  must be processed within 60 calendar days  of registration in SISCOMEX ( SECEX 
Ordinance No.  23 of 14 July 2011 , Arts. 22 and 23).  
68 A list of the tariff lines and import ope rations  for which the analysis of import licensing requests is 
carried out by Banco do Brasil S.A.  can be viewed at: http://www.bb.com.br/docs/pub/dicex/dwn/LIalcadas.pdf  
[29 December 20 16]. 
69 MDIC online information. Viewed at: http://www.mdic.gov.br/comercio -
exterior/importacao/tratamento -administrativo -de-importacao  [29 December 2016] . 
70 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.  WT/TPR/S/358 • Brazil  
 
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  3.1.6   Anti-dumping, countervailing, and safeguard measures  
3.53.   Brazil's institutional framework  on trade remedies remained unchanged  during the period 
under review.71 The MDIC's SECEX, through its Department of Trade Remedies (DECOM), remains 
in charge of carrying out anti -dumping (AD), countervailing  (CV) and safeguard investigations 
(i.e. fact finding and analysis).72 Decision -making regarding the applic ation and modification of 
contingency measures, as well as the exporting economy's market status, remains the remit of the 
Council of Ministers of the Chamber of Foreign Trade (CAMEX), which takes into account DECOM  
recommendations. CAMEX may levy provisio nal duties on imports from the date of its preliminary 
determination.  The Technical Group for Public Interest Assessment (GTIP) , established by CAMEX  
in 2012, remains in charge of examining requests to suspend or modify provisional or definitive 
measures f or reasons of public interest.73 In 2015, the time-frame for GTIP examinations was 
increased from four to six months (renewable once for an equal period of time ).74  
3.54.   The main regulatory framework amendments  undertaken since Brazil's last Review  
concerned the use of electronic means and the investigation and application of AD measures.  
These legislative amendments have been notified to the WTO and discussed in the Committees on 
Anti-Dumping Practices and/or on Subsidies and Countervailing Measures.75 
3.55.   In force f rom October 2013 , Decree No. 8 ,058 introduced new administrative procedures for 
the investigation and application of AD measures.76 In addition, SECEX issued several 
implementing ordinances on: the submission of documents to DECOM; price undertaking offers;  
applications for AD investigations; applications for anti -circumvention reviews; applications for 
sunset reviews; and assessment of scope.77 Besides the clarification of certain definitions and the 
revision (mostly downward)  of various deadlines, the ensui ng procedural innovations include d:  
 mandatory preliminary determinations;  
 mandatory recommendation of the lesser duty for companies that fully cooperate in 
original investigations;  
 a methodology for export price determination when the exporter and the imp orter are 
related parties;  
 refinements to the definition of domestic industry (e.g., possible exclusion of parties 
associated with foreign producers , and geographic sub -division within Brazil's territory);  
 a domestic industry representativeness threshold o f 25% (less if industry fragmented) 
for the admissibility of AD investigation applications (previously 50%);  
 clarifications on the calculation of individual dumping margins for new 
producers/exporters;  
 retroactive application of AD duties; and  
 formalizati on of on -site investigation procedures.  
                                                
71 WTO document WT/TPR/S/283/Rev.1 , 26 July 2013.  
72 While DECOM may not initiate a review without a request from a Brazilian industry , it may decide to 
includ e additional exporting countr ies in duly initiated proceedings whenever there is sufficient information  
justifying such a decision . 
73 Since its creation, the GTIP has initiated 15 examinations  of AD measure s, of which 3 resulted in 
suspension, 1  in a partial suspension , and 1 is still ongoing.  
74 CAMEX Resolution No. 27 of 29 April 2015 . 
75 Written questions and answers regarding the notified laws and regulations are contained in WTO 
documents G/ADP/Q1/BRA/21 to 33 and G/SCM/Q1/BRA/21 to 3 3. 
76 WTO document G/ADP/N/1/BRA/3/Corr.1, 27 September 2013.  
77 SECEX Ordinances No. 34 (10  September 2013), No. 36 (19  September 2013), No. 41 
(11 October  2013), No.  42 (17  October 2013), No. 44 (29  October 2013), and No. 42 ( 14 September 2016) , 
replacing No. 37 (18  September 2013).  WT/TPR/S/358 • Brazil  
 
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  3.56.   Under Brazil 's legislation , AD and CV investigations may be initiated simultaneously for the 
same product. However, an AD measure and a CV  measure cannot be imposed simultaneously on 
a given product for the purpose of neutralizing the same situation of dumping or export subsidy.78 
3.57.   Trade remedies investigation  procedures  were further amended by  Law No. 12 ,995 of 
18 June 2014 , which  established the admissibility of electronic means  and of documents 
elaborated in the official WTO languages .79 Pursuant to the Law, all procedural acts must be 
digitally signed with a certificate compliant with the ICP -Brazil. Details of the electronic 
administrative procedures were set out in Ordinance No. 58 of 29  July 2015.80 Administrative 
procedures relating to AD investigations whose applications were filed as from 31 July 2015  are 
carried out through an electronic system (DDS) maintained by SECEX's DECOM. The system has 
not yet been expanded to CV and safeguard investigations.  
3.58.   Brazil has  regularly submitted semi -annual reports on AD and CV actions to the relevant 
WTO Committees. Notwithstanding the downward trend in investigations  initiated during the 
period under review, the incidence of Brazilian trade remedies, predominantly AD measure s, 
nearly doubled  (Table  3.7). At end-December 2016 , there were 161 definitive AD measures 
(including six price undertakings) in force in Brazil, up from 87  measures (including five price 
undertakings) at end -December 2012.81 During that period , Brazil init iated four CV  investigations, 
one of which (PET film from India) resulted in the imposition of final duties.82 No safeguard 
investigations were initiated and no safeguard measures were ap plied in Brazil between 
January  2013 and January 2017 . At end -2016, 44  Brazil ian trade remedy measures were in force 
for more than five years.  According to the authorities, the share of Brazil's total merchandise 
imports  affected by its trade remedy measures  was 0.76% in 2013 , 0.79% in 2014 , 0.93%  in 
2015, and 1.06% in 2016.  
Table 3.7 Trade remedy actions, 2013 -16 
 2013  2014  2015  2016  
Industry petitions (complaints)  72 53 47 .. 
Original investigations initiated  56 36 23 12 
Anti-dumping  54 35 23 11 
Countervailing  2 1 0 1 
Reviews initiated  11 9 15 12 
Anti-dumping  11 6 11 11 
Anti-circumvention  0 3 4 1 
Provisional anti -dumping measures imposed  6 20 4 4 
Definitive measures imposed  43 42 36 29 
Anti-dumping  43 39 35 27 
Anti-dumping extensions (anti -circumvention)  0 3 1 1 
Countervailing  0 0 0 1 
Measures suspended for public interest reasons  6 1 3 0 
Measures reflecting public interest reasonsa 0 1 3 1 
Measures in force (at 31 December)  110 134 163 173 
Anti-dumping (definitive)  106 126 155 161 
Anti-dumping (provisional)  1 2 1 3 
Anti-dumping extensions (anti -circumvention)  3 6 7 8 
Countervailing  0 0 0 1 
.. Not available.  
a Measures diverging  from DECOM recommendations for reasons of public  interest.  
Source:  Data provided by the Brazilian authorities . 
3.59.   Judicial reviews of CAM EX decisions follow Brazil's general procedures for appeals of 
governmental acts.  Statistics on appeals  are not available, due to the lack of a centralized court 
registry.  Brazilian trade remedy measures have not been the subject of any dispute settlement 
cases at the WTO during the period under review.  
                                                
78 Decree No. 8 ,058 (Art. 1) of 26 July 2013.  
79 WTO documents G/ADP/N/1/BRA/3/Suppl.4, G/SCM/N/1/BRA/2/Suppl.11 and 
G/SG/N/1/BRA/3/Suppl.2 , 18 September 2014.  
80 WTO document G/ADP/N/1/BRA/3/Suppl.7 , 4 January 2016.  
81 WTO documents  G/ADP/N/294/BRA , 24 February 2017 ; and G/ADP/N/237/BRA, 16 April 2013.  
82 WTO document G/SCM/N/305/BRA , 31 August 2016 . WT/TPR/S/358 • Brazil  
 
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  3.1.7   Other measures  
3.60.   Brazil observes the trade sanctions imposed by the United Nations or the regional 
organizations to which it belongs. According to the authorities, Brazil is not a party to any 
agreements or a rrangements seeking to influence the quantity or value of goods and services 
exported to Brazil.  
3.2  Measures Directly Affecting Exports  
3.2.1   Customs procedures and requirements  
3.61.   The registration and customs clearance procedures for commercial exports are similar t o 
those for imports, requiring notably declaration through SISCOMEX and the related registrations 
on first -time use ( Section  3.1.1). Prior to submission of the export declaration , merchandise 
exports must also be recorded  in the export registry (RE), where  financial and fiscal aspects of the 
commercial transaction are entered . Registration  in the RE is requested through SISCOMEX and, in 
the absence of inaccuracies, is confirmed within a maximum of 30 days. Exports financed with 
public funds must be recorded  in a credit register (RC) before being registered  in the RE.83 
According to the authorities, the RE would be phased out with the implementation of new export 
procedures in the context of Brazil's Single Window Programme . 
3.62.   In general, export declarations mus t be processed in SISCOMEX before the merchandise is 
loaded for exportation.84 The supporting documentation includes: bill of lading; packing list; 
commercial invoice; and, in some cases, letter of credit, export licence, certificate of conformity, 
and/or c ertificate of origin. As in the case of imports, exports worth up to  US$50,000 and certain 
items without commercial value may be declared with a simplified export declaration, and 
dispensed from RE formalities.85 Likewise, Brazil's AEO programme offers trus ted exporters various 
trade facilitation advantages ( Section  3.1.1).  
3.63.   SECEX has delegated the responsibility for certifying Brazil ian exports'  compliance with most 
preferential  rules of origin to 57 private institutions.86 All such institutions must have fa cilities for 
the online exchange of digitally signed certificates of origin, in line with the parameters established 
by LAIA's Digital Certification of Origin Project (COD).87 Certifica tes of origin are valid for 
180 days, and must be issued within 60  days of issuance of the commercial invoice if the export 
destination is a LAIA or a MERCOSUR partner . The request for a certificate of origin must be 
accompanied by the commercial invoice and a declaration by the producer.  
3.64.   SECEX's DECEX manages certificates of  origin for in -quota exports of sugar to the EU. 
Banco  do Brasil  S.A. is the sole issuer of certificates of origin for the GSP88 and for in -quota poultry 
exports to the EU. To qualify for preferential treatment, exports of tobacco to the EU must be 
accompan ied by a certificate of authenticity, issued by Banco do Brasil S.A.  or the industrial 
federation of the States of Paraná, Santa Catarina, or Rio Grande do  Sul.89 In addition to the 
certification of origin, a licensing mechanism is in place for Brazilian ex ports subject to tariff quotas 
in destination markets ( Section  3.2.3).  
3.65.   Brazilian exporters of goods and services may keep abroad the totality of their export 
proceeds, but must report their origin and use to the RFB; such proceeds may not be loaned.90 
Repatriation of export proceeds is done through a foreign exchange contract with a financial 
institution authorized by the Central Bank.91  
                                                
83 SECEX Ordinance No. 44 of 6 December 2012.  
84 The exceptions include:  supplies of fuel and food to airl ines and ships in international traffic ; and 
domestic sales of precious stones and jewellery to non -residents . 
85 SECEX Ordinances No. 23 of 14 July 2011 and No. 42 of 7 December 2011.  
86 SECEX Ordinance No. 37 of 1 October 2014.  
87 SECEX Ordinance No. 23 of 14 July 2011.  
88 SECEX Ordinance No. 43 of 22 October 2012.  
89 SECEX Circular No. 9 of 11 February 2009.  
90 Central Bank of Brazil,  Normative Instruction No. 726 of 28 February 2007  and Circular No. 3,548 of 
12 March 2008.  
91 Central Bank of Brazil, Circular N o. 3,527 of 4 March 2011.  WT/TPR/S/358 • Brazil  
 
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  3.2.2   Taxes, charges, and levies  
3.66.   Under the Brazilian Constitution, exports of goods and services (provided abroad) are 
zero-rated for IPI, ICMS, PIS and COFINS tax purposes, and are thus eligible for credits from the 
incidence of any of these taxes on the respective inputs.  
3.67.   Brazil's legislation provides for the application of an export tax with a headline rate of 30%, 
which may b e decreased or increased (up to 150%) by CAMEX for foreign exchange or trade policy 
purposes.92 In practice, the export tax is applied at non -zero rates on just a few products; the 
liable  export flows  and applied rates remain unchanged since Bra zil's previo us Review (Table  3.8). 
Export tax es represent a negligible  and declining share of federal tax revenues  (Table  3.4). 
Table 3.8 Export taxes, 2013 -17 
HS Heading  Products  Destination  Rate 
(%) Purpose (Legislation ) Situation as at 
March  2017  
2402.20.00  Cigarettes 
containing tobacco  South and Central 
America and the 
Caribbean  150 Control the regularity of trade 
flows (Decree No. 2,876 
(14 December 1998))  In place  
4101, 4102, 
4103, 
4104.11, 
4104.19  Raw hides and sk ins 
(bovine, equine, 
sheep or lamb)  Any country  9 Ensuring supply to the domestic 
market (CAMEX Resolution No. 
42 (19  December 2006))  In place  
Chapter 93  Arms and 
ammunition, parts 
and accessories 
thereofa South and Central 
America and the 
Caribbeanb 150 Control the regularity of trade 
flows (CAMEX Resolutions No. 17 
(06 June 2001) and No. 88 
(14 December 2010))  In place  
a Except when destined for authorized consumers and for the military and police forces; fire -arms 
under HS 9302.00. 00 (MERCOSUR classifi cation 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 pr ovided by the Brazilian authorities.  
3.68.   The basis for assessing the export tax is the f.o.b. value or the price of the good in the 
international market at the time of exportation.93 The price 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. Brazil does not maintain minimum export prices, 
except as a basis for calculating the export tax.  
3.2.3   Export prohibitions, restrictions, and licensing  
3.69.   Brazil maintains export prohibitions for environmental protection reasons, and in compliance 
with international agreements and United Nations resolutions.94 The list of export prohibitions 
includes raw leather of amphibians and reptiles, as well as certain o rganic chemicals (if exported to 
non-signatories of the Montreal Protocol). Exports of wood in the rough (HS 4403) are suspended, 
unless approved by the Brazilian Institute of the Environment and Renewable Natural Resources 
(IBAMA).  
3.70.   Export authorization  or licensing  requirements remain in place for a relatively large number 
of products, mainly for safety, health, security, environmental, or native fauna protection reasons. 
Prior authorization  is required for each export shipment, but the authorities note t hat forthcoming 
changes in the context of Brazil's Single Window Programme  (Section  3.1.1) would relax this 
requirement, once SISCOMEX is redesigned for differential treatment of export licences and 
authorizations . 
3.71.   Besides DECEX , 11 government entities have export authorization competences , and some 
products require authorization by more than one entity. According to available information, at 
end-2016 exports classifiable under some 1,548  eight-digit tariff lines, representing around 15% 
                                                
92 Law No. 9,716 of 26 November 1998 and Decree No. 6,759 of 5 February 2009 . 
93 Decree -Law N o. 1,578 of 11 October 1977 and Provisional Measure No. 2,158 -35 of 24 August 2001. 
94 SECEX Ordinance s No. 23 of 14 July 2011 and No. 29 o f 21 August 2013.  WT/TPR/S/358 • Brazil  
 
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  of Brazil's tariff,  were subject to prior authorization.95 At end -2010, the corresponding figure was 
1,055 lines, representing approximately 10% of all tariff lines. The main product categories 
requiring prior export authorization include chemicals, pharmaceuticals, wood prod ucts, and live 
animals.  
3.72.   The Inter -Ministerial Commission for Export Control of Sensitive Goods (CIBES) remains 
responsible for regulating and controlling the exportation of sensitive goods and services.96 
Sensitive items, subject to export licensing and au thorization  by CIBES, include: chemical, 
biological and dual-use goods that could be utilized for war purposes; goods for use in nuclear 
activities and equipment; goods for use in missile -related activities and equipment ; and services 
directly linked to th e production or use of a sensitive good. The lists of controlled products and 
services are prepared, updated, and approved by CIBES.97 Export authorization  by a second 
agency may be required if the product also falls under its competences .  
3.73.   DECEX remains in  charge of licensing of Brazilian exports that are subject to tariff quotas in 
certain destination markets. Quotas for export s to the EU are administered on a 
first-come -first-served  basis (sugar ), on a past -performance basis ( bovine meat ), or on a 
combina tion of both methods ( poultry products ). Licences for bovine and poultry exports are 
conditional on the producer's accreditation by the Ministry of Agriculture, Livestock and Food 
Supply (MAPA) and acceptance as a safe exporter by the competent EU authorit ies. DECEX also 
administers , on first -come -first-served  basis, exports of milk to Colombia under a MERCOSUR tariff 
quota , which is set to expire in 2018 .  
3.2.4   Export support and promotion  
3.2.4.1   Export support schemes  
3.74.   Brazil maintains a number of programmes intended to increase exports and to boost the 
competitiveness of export -oriented companies. In 2015, the Government launched a National 
Export Plan (2015 -18) envisaging a series of actions along five pillars: market access; commercial 
promotion; trade facilitation;  export finance and guarantees; and tax regimes and facilities for 
export support.98 According to the authorities, the Plan is being reviewed by the current 
administration.  
3.75.   Predominantly export -oriented enterprises (deriving more than 50% of their gross sal es 
income from abroad) remain eligible for suspension of the PIS, COFINS, and IPI taxes on the 
purchase of inputs, whether local or imported.99 As at March 2017, there were 505 enterprises 
with predominantly export -oriented status.100  
3.76.   A similar eligibility c riterion is applied under the Special Regime for the Purchase of Capital 
Goods for Exporting Enterprises (RECAP), which suspends the PIS and COFINS on purchases of 
new (unused) capital goods (machines, equipment, and instruments) for incorporation in the 
beneficiary company's fixed assets.101 Enterprises that , in the calendar year preceding application 
to RECAP , made at least 50% of their total gross sales abroad  may benefit from the scheme, 
provided they commit to comply ing with the minimum export sales thre shold for the following two 
calendar years. Start -up companies without the predominantly export -oriented status are eligible 
on condition that they reach and maintain that status over three years. Brazilian shipyards are also 
eligible for RECAP benefits, i rrespective of their export turnover, and do not need to undertake 
export commitments.102  
                                                
95 An indicative list of controlled products and the entities in charge of issuing export authorizations can 
be viewed at: http://ww w.mdic.gov.br/comercio -exterior/exportacao/tratamento -administrativo -de-exportacao  
[03 January 2017].  
96 Law No. 9,112 of 10 October 1995 . 
97 Ministry of Science and Technology online information. Viewed at: 
http://www.mct.gov.br/index.php/content/view/330710.html  [January2017] . 
98 Online information. Viewed at: https://tax.thomsonreuters.com/ blog/onesource/national -export -plan-
brazil/#_ftn2  [13 April 2017].  
99 Laws No. 10,637 (30  December 2002), No. 10,865 (30  April 2004), No. 11,196 (21  November 2005) 
and No. 12,715 (17  September 2012).  
100 According to the authorities, t ax suspension scheme s do not entail any forgone fiscal revenue . 
101 Law No. 11,196 of 21 November 2005, as amended by Law No. 12,715 of 17 September 2012.  
102 SRF Normative Instruction No. 605 of 4 January 2006.  WT/TPR/S/358 • Brazil  
 
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  3.77.   As at March 2017, 359 companies were qualified to participate in RECAP. RECAP was among 
Brazil's duty and tax concessions programmes, which were the object of two disp ute settlement 
proceedings during the period under review ( Section  4.4.3).  
3.78.   In 2014, Brazil reinstated the Special Regime for the Reimbursement of Taxes for Exporters 
(Reintegra ) and made it permanent.103 The scheme enables exporters of certain 
Brazilian -manufactured goods to claim up to 3% of their gross export receipts as offset for 
non-value added (cascading) taxes along the production chain, such as the ISS, IOF, and CIDE.104 
In general, the Brazilian -manufactured exports eligible for Reintegra are drawn fr om the IPI 
incidence list ( Tabela de incidência do IPI , Section  3.1.4) and  their imported content may not 
exceed 40% of their export price.105 According to the authorities, reimbursements made under 
Reintegra totalled R$12,365 million between January 2013 an d June 2016. The number of 
Reintegra beneficiaries increased from 286 in the first quarter of 2012 to 1,409 in the fourth 
quarter of 2015.  
3.79.   Brazil's drawback regime remained unchanged during the period under review.106 It 
provides for the suspension or exempt ion of import tariffs and federal indirect taxes (IPI, PIS, 
COFINS, ICMS, and AFRMM) on local or imported inputs and parts used to produce exportable 
goods. The drawback regime's suspension modality allows ex ante  deferral of duties and taxes on 
inputs, wh ereas the exemption modality provides for the rebuilding of stocks ex post , after the 
final good has been exported. During 2013 -16, annual exports under drawback represented some 
21% to 25% of total exports, whereas the corresponding figures for imports ra nged between 3% 
and 5% (Table  3.9). 
Table 3.9 Drawback regime implementation, 2013 -16 
 2013  2014  2015  2016  
Exports under drawback (US$ million)  51,136.6  53,310.9  47,159.4  42,209.4  
Share of total exports (%)  21.1 23.8 24.7 22.8 
Imports under drawback (US$ million)  6,511.2  7,815.1  7,955.0  7,176.0  
Share of total imports (%)  2.7 3.4 4.6 5.2 
Fiscal footprint of imports under drawback (R$ million)a 4,669.1  4,947.7  7,378.8  .. 
.. Not available.  
a Comprises impo rt duties and IPI, PIS, and COFINS taxes under both the suspension and the 
exemption modalities. Does not include AFRMM tax.  
Source:  MDIC online information. Viewed at: http://www.mdic.gov.br/comercio -exterior/drawback/dados -
consolidados -de-drawback  and 
http://www.mdic.gov.br/images /REPOSITORIO/secex/decex/Dados_drawback/Renncia -fiscal-
drawback ---tributos -federais.pdf . 
3.80.   The Special System of Industrial Depots subject to Standardized Control (RECOF) allows the 
suspen sion (for one year, extendable once) of import duties and indirect ta xes (IPI, PIS, COFINS) 
on imported or local inputs employed in the industrial transformation of products destined for 
export or the domestic market. Domestic sales of any (local or imported) inputs or the final good 
are subject to all applicable duties and  taxes. During the period under review, Brazil relaxed 
several eligibility criteria (paid -in capital, prior accreditation to the "blue line" express clearance 
facility, and annual export volume) and removed the sector -specific and product -specific 
limitati ons on the scheme's scope.107 As from 2016, beneficiaries are no longer required to acquire 
purpose -built control systems because the RFB switched to compliance monitoring through the 
Public System of Digital Bookkeeping (SPED). Under the upgraded RECOF -SPED , beneficiaries 
must: (i) regularly submit their digital fiscal records (EFD); (ii) export final goods worth at least 
80% of the annual value of imports and not less than US$5  million; and (iii) carry out the 
                                                
103 Law No. 13,043 of 13 November 2014 and Decree No. 8,415 of 27 Februa ry 2015.  
104 The offset may take the form of either a credit against federal tax liabilities or a cash payment.  
105 A 65% imported content threshold applies to: pharmaceuticals; electric appliances and materials; 
aircraft and parts; optical, precision measurin g, medical or surgical instruments and apparatus; and clocks and 
watches (Decree No. 8,415 of 27 February 2015).  
106 WTO Document WT/TPR/S/283/Rev.1 , 26 July 2013.  
107 RFB Normative Instructions No. 1,559 (14  April 2015) and No. 1,612 (26  January 2016), and CO ANA 
Ordinance No. 47 of 30 June 2016.  WT/TPR/S/358 • Brazil  
 
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  industrial transformation of at least 80% of th e imported goods.108 As at January 2017, there were 
25 companies qualified under RECOF.  
3.81.   Brazil continues to apply the Special Regime for the Information Technology Exportation 
Platform (REPES) , targeting companies dedicated exclusively to the development of software and 
the provision of IT services. REPES suspends the IPI on imported goods without a domestic 
equivalent (except second -hand ones) for their incorporation as fixed assets, as well as the PIS 
and COFINS on purchases of IT services and new goods. Be neficiaries must export software and IT 
services worth at least 80% of their annual gross income.109  
3.2.4.2   Export -processing zones  
3.82.   The legal and institutional framework for export -processing zones (EPZs) remains 
unchanged since Brazil's last Review.110 The National  Council of Export Processing Zones (CZPE) 
remains in charge of implementing Brazil's EPZ policy, including authorizing the creation of EPZs 
and the establishment of companies therein.111 The operationalization of an EPZ also requires the 
Brazilian customs a uthority's permission and final approval from the President of the Republic. 
Approved EPZs that fail to start operations within 48  months of their agreed installation timetable 
may lose their right to establish.112 As of January 2017, Brazil had 25 approved EPZ projects, of 
which 1 was operational and 18 (located in 17 Brazilian states) were in the process of 
establishment.  
3.83.   The fiscal and administrative benefits available to authorized EPZ companies, as well as 
their 20 -year legal guarantee clause,  also remai n unchanged.113 The value of the exports of 
companies based in EPZs must be at least 80% of their gross income from sales of goods and 
services.114 Products sold on the Brazilian market, as well as goods and services used as inputs in 
the production of those d omestic sales, are subject to all duties and taxes levied on domestic 
acquisition or importation. The duty and tax amount due must be paid with interest at the SELIC  
rate (Section 1.2.2) . 
3.2.4.3   Export promotion  
3.84.   The Brazilian Trade and Investment Promotion Agency  (Apex -Brasil) remains in charge of 
coordinating and implementing policies for the promotion of Brazilian goods and services overseas, 
for the internationalization of Brazilian companies, and for attracting FDI.115 Although it supports 
companies of all sizes , Apex -Brasil maintains a particular focus on activities that help enhance 
exports of small and medium -size enterprises, foster competitiveness and create jobs. Other 
strategic priorities include: increasing the participation of Brazilian companies in inte rnational 
value chains; fostering innovation, design and technology transfer; and encouraging the use of 
"sociobiodiverse" resources. Apex -Brasil provides services, such as market intelligence, business 
capacity -building, trade and image promotion, and dev elopment of internationalization strategies. 
Its trade promotion activities include the participation in trade missions and international trade 
fairs, as well as visits of foreign buyers to Brazil.  
3.85.   Apex-Brasil is responsible for the execution of export pr omotion policies, in close 
coordination with the Trade and Investment Promotion Department of the Ministry of Foreign 
Affairs (MRE), and in cooperation with public authorities and private -sector associations 
                                                
108 The exports threshold is reduced to 50% for companies in their first year of admission to 
RECOF -SPED. The industrial transformation of imports threshold is reduced to 70% for companies supplying 
the domestic market w ith parts and pieces for the maintenance of their manufactured products.  
109 Law No. 11,196 of 21 November 2005 and SRF Normative Instruction No. 630 of 15 March 2006.  
110 WTO document WT/TPR/S/283/Rev.1 , 26 July 2013.  
111 Authorizations are valid for 20 years, renewable for the same number of years in the case of 
investments requiring long amortization periods.  
112 Law No. 12,507 of 11 October 2011 and Law No. 12,767 of 27 December 2012.  
113 Authorized EPZ companies may purchase local or import ed goods and services with the suspension of 
import duties, the IPI, COFINS, PIS, and AFRMM. They are exempt from licensing and authorization 
requirements (at the federal level) for imports and exports, except for those related to sanitary controls, 
national security, and envir onmental protection. Additional fiscal benefits, including lower corporate income tax 
and accelerated depreciation, are available to enterprises located in the SUDENE and SUDAM areas.  
114 Law No. 11,732 of 30 June 2008.  
115 Decree No. 4,584 of 5 February 2003 and Law N o. 10,668 of 14 May 2003.  WT/TPR/S/358 • Brazil  
 
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  representing 89  strategic economic sectors (incl uding 20 services sectors). Export promotion 
support generally takes the form of technical and financial cooperation agreements between 
Apex-Brasil and private -sector associations, which include co -financing for up to 70% of a project's 
total value. As of  December 2016, Apex -Brasil supported 12,971 Brazilian companies, which 
accounted for 22.9% of total exports. According to the authorities, during 2013 -16, Apex -Brasil 
allocated US$412.8 million to trade and investment promotion activities.  
3.86.   In addition to Apex-Brasil, trade information and support services to exporters are made 
available by several public and private institutions, including the MDIC, the MRE and Banco do 
Brasil S.A . These entities maintain several online platforms aimed at facilitating the 
internationalization of Brazilian companies.116 Banco do Brasil S.A . and Caixa Econômica Federal  
also offer Brazilian enterprises with gross annual sales of up to R$10  million a credit line ( Proger 
Exportação Promoção Comercial ) for export promotion activiti es, such as participation in trade 
fairs in Brazil and abroad, shipment of samples , and investments in digital marketing, including 
through the online marketplace B2Brazil.117  
3.87.   Outward payments for the promotion of Brazilian products and services abroad are eligible 
for a reduction of the applicable income tax (IR) to 0% ( from the standard 25%).118 To benefit 
from the reduction , the legal person making the outward payment must register  the promotion 
transaction in the Registration System for Promotion Informati on (SISPROM) prior to remitting the 
amount due. SISPROM registration is declined if the payment beneficiary is based in a jurisdiction 
that taxes income at less than 20%.119 During 2013 -16, there were 1,102 registered beneficiaries 
and 10,506 promotion trans actions. Forgone revenue from the IR reduction was estimated at 
some R$23.9 million in 2013 and projected at R$23.3 million in 2014, R$31. 7 million in 2015, and 
R$38.6 million in 2016.  
3.2.5   Export finance, insurance, and guarantees  
3.88.   The Export Financing and Guar antee Committee (COFIG) of CAMEX remains in charge of: 
establishing the parameters and conditions for granting federal financial assistance to Brazilian 
exports; overseeing the operations of the Export Financing Programme (PROEX) and the Export 
Guarantee F und (FGE); and guiding the Federal Government's participation in the Export Financing 
Fund (FFEX).120 The Brazilian Development Bank (BNDES) continues operating several federally 
funded export credit schemes under the BNDES -EXIM programme. Federal funding in  support of 
Brazilian exports is generally provided regardless of the exporter's ownership. No information was 
available on sub -federal export support.  
3.89.   Funded with outlays from the federal budget and administered by Banco do Brasil S.A ., 
PROEX is aimed at providing credit to Brazilian exporters of eligible goods and services at 
conditions similar to those prevailing in international markets.121 In principle, it addresses 
financing gaps where the private sector may not be able to fully respond to the needs of Brazilian 
businesses. The programme has two main modalities: direct financing (PROEX -Financing) and 
interest rate equalization (PROEX -Equalization).  
3.90.   PROEX -Financing provides direct credit to the exporter or overseas buyer of eligible 
Brazilian goods and s ervices. It is predominantly, but not exclusively, targeted at micro, small, and 
medium -sized enterprises ( MSMEs) with an annual turnover of up to R$600 million. Financing is 
available for up to 100% of the value of exports for credit periods of between tw o months and 
2 years, and up to 85% for longer periods (up to 10 years). There is no minimum value for 
                                                
116 Details on entities and tools assisting exporters can be viewed at: 
http://www.investexportbrasil.gov.br/  and http://www.aprendendoaexportar.gov.br/sitio/paginas/index.html  
[9 January 2017].  
117 Banco do Brasil  online information. Viewed at: http://www.bb.com.br/pbb/pagina -
inicial/empresas/produtos -e-servicos/comercio -exterior/marketing -digital#/  [09 January 2017].  
118 Decree No. 6,761 of 5 February 2009.  
119 MDIC Ordinance No. 221 of 8 July 2013.  
120 Online information. Viewed at: http://www.sain.fazenda.gov.br/assuntos/credito -e-garantia -as-
exportacoes/comite -de-financiamento -e-garantia -das-exportacoes  [09 January 2017].  
121 For exports destined  to Brazil's MERCOSUR partners, PROEX support is limited to capital goods only. 
PROEX eligibility conditions for exported goods and services are set out in  CAMEX Resolution No. 126 of 
26 December 2013.  WT/TPR/S/358 • Brazil  
 
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  individual export operations to be financed.122 Since 2014, up to 25% of the annual budget of 
PROEX -Financing may be used for concessional credits in suppo rt of Brazilian exports under 
Brazil's technical cooperation projects, including the More Food Programme.123 Concessional loans 
are approved on an individual basis by COFIG, in line with general guidelines elaborated by 
CAMEX. The concessionality level is ca lculated according to the IMF/World Bank grant element 
methodology , and may be up to 35%.  
3.91.   PROEX -Equalization aims to level the international playing field by partially offsetting the 
cost of a credit obtained from any financial institution (in Brazil or ab road) to finance Brazilian 
exports. Eligible credits are those obtained by the exporter, as well as those obtained by the 
foreign customer for the payment of Brazilian exports. The credit terms (interest rates, financing 
percentage and collateral) are nego tiated between the financing institution and the exporter.124 
Equalization may be granted on credits financing up to 100% of the value of the exports for 
periods ranging from 60 days to 15 years.125  
3.92.   During 2013 -16, PROEX -Financing was granted mainly for expor ts to Cuba, China, the EU 
and Mozambique, whereas exports benefitting from PROEX -Equalization were mostly shipped to 
the UAE, Angola and Peru. Disbursements under both modalities peaked in 2014 and decreased 
somewhat thereafter (Table  3.10).  
Table 3.10 PROEX implementation, 2013 -16 
Year Budget (R$)  Total financing 
granted (US$)  No. of 
beneficiaries  Export business 
volume (US$)  Main beneficiary industries  
PROEX -Financing  
2013 1,500,000,000  447,270,273  204 514,248,666  Agribusiness (58%); 
machinery and equipment 
(12%); textiles, leather and 
footwear (22%)  
2014 2,900,000,000  456,185,906  183 514,350,020  Agribusiness (56%); 
machinery and equipment 
(15%); textiles, leather and 
footwear (14%)  
2015 2,000,000,00 0 329,675,220  147 360,813,640  Food (30%); mineral 
extraction (18%); machinery 
(16%); textiles and footwear 
(17%); vehicles (16%)  
2016 2,200,000,000  397,926,694  183 426,753,789  Machinery (27%); textiles and 
footwear (19%); food (18%); 
mineral extractio n (14%); 
vehicles (11%); others (11%)  
PROEX -Equalization  
2013 1,600,000,000  298,683,326  40 5,772,132,070  Machinery and equipment 
(69%); services (30%); 
aircraft (1%)  
2014 1,167,229,600  313,113,352  31 6,312,876,422  Machinery and equipment 
(58%); Serv ices (30%); 
aircraft (13%)  
2015 1,500,000,000  211,149,851  24 5,135,160,225  Machinery and equipment 
(45%); aircraft (29%); 
services (17%); vehicles 
(19%)  
2016 2,000,000,000  176,692,533  22 5,796,055,214  Machinery and equipment 
(44%); aircraft (28%); 
services (14%); vehicles 
(14%)  
Source:  Information provided by the Brazilian authorities.  
                                                
122 Credit operations for the aeronautics sector and those exceeding US$20 million are subject to COFIG 
approval.  
123 National Monetary Council ( Conselho Monetário Nacional  –CMN) Resolution No. 4,335 of 
26 May 2014.  
124 Equalization is paid by way of National Treasury Notes (NTN -I) to the institution granting the export 
credit.  
125 Equalization operations for the aeronautics sector and for infrastructure works require COFIG 
approval.  WT/TPR/S/358 • Brazil  
 
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  3.93.   In principle,  Banco do Brasil S.A . is also the administrator of the FFEX , created in 2011 with 
a view to supporting exports by companies with an annual turnover of up to R$90 million.126 
According to the authorities, the Federal Government has not made its planned initial contribution 
(R$1 billion) to the FFEX and the fund has not become operational.  
3.94.   Through its BNDES -EXIM programme, BNDES provides credits in support of Brazilian 
exporters. Financing is made available for the production of exportable goods and services 
(pre-shipment) and for their commercialization overseas (post -shipment).127 Special financing 
conditions apply to MSMEs under some BNDES -EXIM sub -programmes (Table A3.1). Credit 
operations are conducted through accredited financial institutions, which include most banks 
operating in Brazil and several local banks in Latin America and Africa.128 Resources for BNDES 
operations, including BNDES -EXIM, come mostly fr om public funds ( Section  3.3.1.3). 
3.95.   While access to export financing is framed by a general list of eligible goods and services129, 
certain BNDES -EXIM sub -programmes may target specific products or industries. In addition, for 
most sub -programmes , automatic q ualification for financing is condition al on meeting a certain 
index of nationalization (typically 50% -60% in value or weight terms), Basic Productive Process 
(PPB) thresholds ( Section  3.3.1.1 ), or other criteria established by BNDES (Table  A3.1).130 
Accordi ng to the Brazilian authorities, goods and services that do not meet these conditions may 
also benefit from the sub -programmes after receiving a favourable assessment (non -automatic 
qualification).  
3.96.   During the period under review, most BNDES -EXIM sub -progra mmes were frequently 
updated, generally with a view to improving the financing terms offered to MSMEs. One new EXIM 
sub-programme (EXIM Pre -shipment " Innovator ") was added , and two (EXIM Pro -Aviation exports 
and EXIM Pre -shipment "automobiles") expired; su pport for exports by Brazil's aviation industry 
was reoriented to the post -shipment stage. Two non -EXIM financing modalities (PSI – Export 
Pre-shipment , and Revitalize Exports – Export Pre -shipment) also expired.  
3.97.   BNDES export financing decreased sharply d uring 2013 -15 before recove ring somewhat 
in 2016 (Table 3.11 ). The total number of BNDES -EXIM beneficiaries also dropped from 
252 in 2013 to 83 in 2015, but increased to 133 in 2016. During 2013 -16, the main beneficiary 
industries were transport equipment,  machinery and equipment, and construction services. The 
main export markets for projects benefitting from post -shipment financing were the United States, 
the Bolivarian Republic of Venezuela, Angola and Cuba.  
Table 3.11 BNDES total disbursements for exports of goods and services, 2013 -16 
(US$ million)  
Year Total 
disbursements  For exports 
of goods  % of total 
exports of goods  For exports of 
services  % of total exports 
of services  
2013 7,136.51  5,797.05  2.4 1,339.46 3.6 
2014 4,376.92  3,394.39  1.5 982.53  2.5 
2015 2,093.75  1,565.49  0.7 528.26  1.6 
2016 4,393.93  4,350.62  2.3 43.31  0.1 
Source:  WTO Secretariat, based on information provided by BNDES.  
3.98.   Banco do Brasil S.A . and Caixa Econômica Federal  administer PROGE R Export, an export 
financing facility funded with resources from a workers fund ( Fundo de Amparo ao Trabalhador,  
                                                
126 Law No. 12,545 of 14 December 2011.  
127 Post-shipment financing may take the for m of, inter alia , exporter credit, buyer's credit and credit 
lines to an accredited overseas financial institution.  
128 The total financial cost for the borrower is the relevant interest rate plus the spreads of BNDES and 
the financial institution that admin isters the credit.  
129 BNDES Circular No. 006/2016 of 14 April 2016. An English version can be viewed at: 
http://www.bndes.gov.br/SiteBN DES/export/sites/default/bndes_en/Galerias/Download/financeable_products.
pdf [13 January 2017].  
130 Eligibility conditions for BNDES -Exim programmes  can be viewed at: 
http://www.bndes.gov.br/SiteBNDES/bndes/bndes_pt/Institucional/Apoio_Financeiro/Produtos/BNDES_Exim/n
ormas_exim.html  [23 March 201 7]. WT/TPR/S/358 • Brazil  
 
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  FAT).131 Eligible goods and services exports are those qualifying for BNDES support132; export 
marketing activities are also supported ( Section  3.2.4). Beneficiaries are exporting enterprises 
with a gross annual turnover of up to R$10  million, constituted under Brazilian laws and having 
their headquarters in Brazil. The scheme does not apply to trading companies (ECEs). Financing 
may be granted for up to 100% of the value of the project, but no more than R$600,000 per 
exporter, and for a maximum of  12 months.133 No information was available for the period under 
review on beneficiary participation, interest rates and disbursements made under the PROGER 
Export facility.  
3.99.   The FAT Export Fund financed pre -shipment production (working capital and necessary 
inputs) of exportable goods until September 2014, when it was discontinued. Financing could be 
granted for up to 100% of a project's value, with a cap to b e defined on a case -by-case basis by 
the BNDES, and maturity periods of up to 30 months. All export -oriented companies, regardless of 
their size, were eligible for financing, provided they were incorporated and headquartered in Brazil. 
Product -specific eli gibility conditions were identical to those of the BNDES pre -shipment 
programme. According to the authorities, the FAT Export Fund's  total endowment (R$2.6 billion) 
had not been increased since 2005. No information was available for the period under review  on 
beneficiary participation, interest rates and disbursements made.  
3.100.   As from 2014, the Brazilian Guarantees Agency (ABGF), a public enterprise reporting to 
the Ministry of Planning, Development and Management, provides support in the administration of 
the federal export credit insurance (SCE) scheme backed by the FGE.134 The ABGF is responsible 
for the structuring, management and monitoring of SCE operations.135 The granting of SCE 
coverage is underwritten by the Secretariat for International Affairs (SAIN) of  the Ministry of 
Finance.136 The FGE is financed by resources from the federal budget and by proceeds and 
financial gains from the fund's own activities and financial operations. According to the authorities, 
there are no other export insurance or guarantee schemes funded by federal resources in Brazil.  
3.101.   The SCE covers export credit operations against various risks that may affect the 
production or overseas commercialization of Brazilian goods and services. Federally backed SCE 
coverage may be up to 95% for co mmercial risks and up to 100% for political and extraordinary 
risks, as well as for commercial risks in operations supported by a bank guarantee and operations 
of the aeronautics industry. A coverage threshold of 100% also applies to commercial risks in 
export operations of MSMEs137, and to contractual obligati ons risks for the defence sector and for 
agricultural products benefiting from preferential tariff quotas in foreign markets. Coverage against  
commercial risks is generally provided for export credit tr ansactions with maturity periods 
exceeding two years, although MSMEs can obtain coverage for shorter maturity periods. The 
scheme may be used by exporters, financial institutions and export credit agencies that finance, 
refinance or guarantee Brazilian exp orts.  
3.102.   Premiums are calculated on a case -by-case basis, taking into account the principal 
financed under the operation, the destination country, the nature of the risk (commercial, political 
or extraordinary), the maturity of the operation, and the debtor' s financial standing. There are no 
minimum local content requirements and no eligibility restrictions as to the type of exported goods 
and services; destination country eligibility may be affected by internal risk exposure limits.  
3.103.   Having contracted in 201 4-15, the total amount of premiums underwritten reboun ded 
strongly in 2016 (Table 3.12 ). The FGE's total risk exposure declined over the same period and 
was dominated by export transactions to the Bolivarian Republic of Venezuela, Argentina, the 
                                                
131 The legal basis of the PROGER scheme is provided by Deliberative Council of t he FAT ( Conselho 
Deliberativo do Fundo de Amparo ao Trabalhador  – CODEFAT) Resolutions No. 348 of 5  August  2003, No. 347 
of 5 August 2003, and No. 330 of 10  July 2003.  
132 BNDES Circular No. 006/2016 of 14 April 2016.  
133 In July 2013 , the gross annual turnove r and individual financing thresholds were R$5  million and 
R$250,000, respectively.  
134 Law No. 12,712 of 13 August 2012 and Decree No. 7,976 of 1 April 2013.  
135 Up until September 2014, the Brazilian Export Credit Insurance Company S.A. (SBCE)  had been 
hired by the Ministry of Finance to perform these duties. After that date, the SBCE  has been provid ing export 
credit insurance as a private company . 
136 MF Ordinance No. 490 of 17 September 2013.  
137 For the purposes of the SCE scheme, MSMEs are defined as com panie s with sales of up to 
R$90 million and exports of up to US$3 million in the previous calendar year.  WT/TPR/S/358 • Brazil  
 
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  United Sta tes, Angola, the Dominican Republic, Cuba and Ghana. The main beneficiaries of the 
SCE scheme were from the air and automotive transport, defence and energy sectors.  
Table 3.12 SCE/FGE activity, 2013 -16 
Year Policies issued  Exporters  Total premiums (R$)  FGE risk exposure,  
end of the year (US$)  
2013 33 34 391,394,055.01  29,754,101,433.20  
2014 18 23 326,718,247.12  31,061,065,488.11  
2015 20 33 244,384,766.64  28,441,795,855.82  
2016 11 59 451,031,657.27  24,986,660,369.81  
Source:  Information provided by the Brazilian authorities.  
3.3  Measures Affecting Production and Trade  
3.3.1   Incentives  
3.3.1.1   Overview  
3.104.   In Brazil, incentives and government assistance are available in various configurations, 
with programmes administered at both the federal and sub -federal levels. The scope of incentive 
programmes may be regional, sectoral or outcome -specific (e.g. fostering research). Most 
initiatives seek to promote entrepreneurship, technological and infrastructure upgrades, 
innovation,  exports ( Section  3.2.4), energy efficiency, and regional development. Specific federal 
programmes are in place for the automotive, information technology, aeronautics, and petroleum 
industries ( Section  4). The range of support measures includes: targeted long-term loans138; tax 
incentives; non -repayable financial contributions; equity financing; accelerated depreciation; 
guarantees; grants; advisory services; and credit insurance.  
3.105.   The Brazilian Agency for Industrial Development maintains an online database with 
non-exhaustive information on federal and sub -federal support initiatives.139 A compilation of 
incentives to productive investment granted by the Federal Government is made available by the 
National Investment Information Network (RENAI).140 The RFB also publishes annual overviews of 
newly established tax concessions.141 An overview of federal incentive schemes is presented in 
Table A3 .2.  
3.106.   Various federal programmes aim to encourage investment in Brazil's less developed 
regions. Enterprises in the automotive  industry located in the north, north -east and mid -west 
regions were eligible for federal fiscal incentives, consisting of a multiplier on presumed IPI credits, 
until December 2015. The IPI credit multiplier was 1.8 in 2013, 1.7 in 2014, and 1.5 in 2015.142 
The benefit was conditional on investing at least 10% of the value of the tax in R&D and 
technological innovation, including in automotive engineering, in the se region s.  
3.107.   Most state and municipal governments offer incentives to businesses independently of the 
federal programmes in place. At the time of Brazil's previous Review, approximately 50 state -level 
incentive programmes were being challenged at the Federal Supreme Court, mostly on grounds 
involving ICMS tax treatment issues.143 More recent statistics o n legal challenge s involving such  
measures were not available.  
3.108.   According to the National Treasury, federal government expenditure on incentive and 
support programmes (excluding forgone revenue) amounted to R$ 163.2 million (0.00 3% of GDP) 
                                                
138 According to the authorities, most credit initiatives address financing gaps where the private sector 
may not be able to fully respond to the needs of Bra zilian businesses , as there are no private providers of 
long-term financing in Brazil.  
139 Brazilian Agency for Industrial Development, Guide to Industrial Development Support Instruments.  
Viewed at: http:/ /guia.abdi.com.br/default.aspx  
140 RENAI online information. Viewed at: http://investimentos.mdic.gov.br/conteudo/index/item/31  
[12 January 2017].  
141 RFB online information. Viewed at: http://idg.receita.fazenda.gov.br/dados/receitadata/renuncia -
fiscal/desoneracoes -instituidas/desoneracoes -instituidas -capa [12 January 2017].  
142 Law No.  9,440 of 14 March 1997 , amended by Law No.  12,218 of 30 March 2010.  
143 WTO document WT/TPR/S/283/Rev.1 , 26 July 2013.  WT/TPR/S/358 • Brazil  
 
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  in 201 6, against R $51.6  million (0.001% of GDP) in 2013 .144 The authorities affirm that all 
initiatives are assessed regularly to ensure that they effectively address market failures, which 
may constitute serious obstacles to the attainment of Brazil's development objectives.  However, a 
recent study of the fiscal cost of Brazil's industrial policy suggests that Brazilian industry has 
become increasingly dependent on incentives, rather than improving its international 
competitiveness. It also points out that some of the tax bre aks have been put in place to 
compensate for deficiencies in Brazil's complex tax system, such as the cascading effect of taxes 
levied on a cumulative (non -value added) basis.145  
3.109.   Incentives granted in the context of certain federal programmes promoting the production 
of information technology, telecommunications and automation goods146 are linked to 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.147 Companies 
seeking to benefit from these incentives must submit a project proposal demonstrating, inter alia , 
that their production will comply with the PPB criteria established for the particular product(s).148 
As from 2013,  applicants may obtain provisional approval, which allows them to benefit from the 
incentives while the regular approval procedure is still ongoing.149 In addition, 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. 4.6).  
3.110.   PPB criteria are established (and modified) by inter -ministerial decrees signed by the 
ministers in charge of the MDIC a nd of Science, Technology and Innovation (MCTI). Proposals to 
that effect are elaborated, upon request from interested companies, by a technical group (GT -PPB) 
comprising representatives of the two Ministries 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 manufacturers; technological development 
and local engineering skills employed; jobs created; investment in R&D; and  the incentives' 
possible negative ext ernalities within Brazil (e.g. relocation of production or altered investment 
decisions of competitors).150 The time -frame for assessment of  PPB requests is 120  days.  
3.111.   Some 135 inter -ministerial ordinances establishing n ew PPBs were adopted between 
January 2013 and January 2017.151 As at January 2017, incentives contingent on PPB criteria 
applied to some 459 companies established in the ZFM, and to 600 companies approved under the 
capacity -building and competitiveness -enhan cement in IT programme.  
3.112.   During the period under review, Brazil was the respondent in two dispute settlement 
proceedings initiated separately by Japan and the EU against some of its tax incentive schemes 
(Section  2.5.1).  
3.113.   Brazil's most recent notification to the WTO Committee on Subsidies and Countervailing 
Measures  dates from 2014 and covers fiscal years 2011 and 2012. The notified 11 federal subsidy 
programmes are the same as at the time of Brazil's last Review, although no disbursements took 
place under 2 of these programmes (Table  3.13).152 Following the notification, Brazil provided 
answers to requests for clarification by the United States, New Zealand, Canada and Australia.153 
                                                
144 National Treasury online information. Viewed at: https://www.tesouro.fazenda.gov.br/resultado -do-
tesouro -nacional  [17 January 2017].  
145 Marcelo Curado and Thiago Curado, Uma estimativa dos custos fiscais da política industrial recente 
(2004 -2016) , IPEA Discussion Paper No. 2248 , November 2016.  
146 During 2013 -16, PPB -linked programmes included: capacity -building and competitiveness 
enhancement in IT (Lei da informática ), Law No. 8,248 of 23 October 1991 ; computers for educational use  
(REICOMP) and the national broadband programme (REPNBL -Redes) , Law No. 12,715 of 17  September  2012); 
and digital inclusion, Law No. 11,196 of 21 November 2005 . The REICOMP programme expired in 2015.   
147 The PPBs are set with a view to maximizing the utilization of productive capacity installed in Brazil ; 
they do not involve any thresholds for domestic value added, inputs or labour.  
148 An electronic system for the submission and processing of project proposals was established in 2014 
(MCTI/MDIC Ordinance No. 202 of 13 February 2014).  
149 Decree No. 8,072 of 14 August 2013.  
150 Inter-ministerial Ordinance No. 170 of 4 August 2010.  
151 MCTI online information. Viewed at: 
http://www.mct.gov.br/index.php/content/view/723.html?execview  [13 January 2017].  
152 WTO document WT/TPR/S/283/Rev.1 of 26 July 2013.  
153 WTO documents G/SCM/Q2/BRA/43 to 46 ( 24 October 2014)  and G/SCM/Q2/BRA/48 
(11 April 2016).  WT/TPR/S/358 • Brazil  
 
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  Table 3.13 Subsidy programmes no tified to the WTO, 2011 and 2012  
Type  Programmes  Forms of support  Amount (R$ million)  
2011  2012  
Industrial  Support for the development of the pharmaceutical 
productive chain (PROFARMA – Innovation); 
Capacity -building and competitiveness -enhancement 
in IT (Lei da informática ); Industrial technology and 
agricultural/cattle breeding technology development 
programmes (PDTI/PDTA)a; Productive development 
policy (PDP)  Long-term financing; 
equity participation; tax 
credits; accelerated 
depreciation  4,006.7  4,680.2  
Regional  Amazon Development Authority 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/FUNRES); 
Constitutional funds for financing the no rth-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  27,739.6  31,482.5  
Fisheries Programme for economic subvention to the price of 
diesel oil used by fishing vessels; Programme for 
financing the enlargement and modernization of 
national fishing fleet (PROFROTA)a Fuel price support 
(equal ization); loan 
performance bonus 
(interest payment 
discount)  17.2 2.8 
a No disbursements took place in 2011 and 2012.  
Source:  WTO document G/SCM/N/253/BRA, 5 May 2014.  
3.3.1.2   Free-trade zones  
3.114.   Brazil's legislation provides for the establishment of free -trade zone s (FTZ s), for imports 
and exports, with a view to promoting the development and regional integration of border areas in 
the north region.154 There have been no changes to the number of existing FTZs and their 
operational status since Brazil's last Review.155 Out of the eight FTZs that have been created, the 
ZFM remains the only one hosting production operations; residents in three other zones are 
engaged in commerce operations.156The SUFRAMA, an autonomous agency linked to the MDIC, 
remains in charge of all FTZs in Brazil. All imports to the FTZs require authorization by both SECEX 
and SUFRAMA.  
3.115.   As at March 2017, some 459 companies were residing in the ZFM , and the other FTZs had 
a total of 82 resident companies. Eligibility for establishment in the ZFM is conditio nal on observing 
PPB criteria ( Section  3.3.3.1); a number of environmental and social requirements also apply. 
Companies established in the ZFM are granted tax concessions by the federal and state 
governments.157 Incentives under the ZFM programme will be in  force until 2073.158  
3.116.   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 1996159, 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 materials used in the production of industrial 
goods in the ZFM to be sold in the re st of Brazil; (iii) reduction of import duties on inputs 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 the total production (the coefficient of 
reduction is increased by 5% for motor vehicles); (iv) IPI exemption for goods produced in the 
                                                
154 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.  
155 WTO Document WT/TPR/S/283/Rev.1 of 26 July 2013.  
156 There are also eight regional points ( coordenação regional , CORE), of which seven offer incentives 
only for the processing of f ish, natural resources or forestry and agricultural raw materials. SUFRAMA online 
information. Viewed at: http://site.suframa.gov.br/assuntos/modelo -zona-franca-de-manaus/area -de-
beneficios  [13 January 2017].  
157 According to the authorities, municipal  government incentives  based on Municipal Law No. 427/1998  
expired in 2008 . 
158 Constitutional Amendment No.  83 of 5 August 2014. 
159 SUFRAMA online information. View ed at: http://www.suframa.gov.br/  
download/le gislacao/ppb/1996/pi -300-96.pdf  WT/TPR/S/358 • Brazil  
 
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  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 and COFINS contributions for operations in the ZFM; and 
(ix) 75% reduction of income tax until 2013.  
3.117.   In addition, the State of Amazonas grants the following fiscal ince ntives: (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; and (iii) a reduction of the tax base for the calculation 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).160 There is also the possibility of deferring the ICMS for imports 
of raw materials, and of reducing the ICMS rate to 4%.161  
3.118.   ZFM beneficiaries may also take advantage of the Western Amazon Export Special 
Programme (PEXPAM), which allows the importation of raw materials, inputs and industrial 
components exclusively for export , and grants exemption from import duties, IPI, ICMS, and any 
other tax or financial retribution to any public body. Eligibility for the PEXPAM programme is not 
conditional on compliance with PPB.  
3.119.   There are no restrictions on shipments 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 any 
quantitative limits. Goods imported into Brazil from the ZFM are subject to all import duties and 
taxes normally assessed , with the except ion of duties on inputs, which are reduced by up to 
88%.162 The reduction does not apply to informatics products or to vehicles, to which the full duty 
is applied. Products manufactured in the ZFM solely with imported inputs, goods sold to other 
FTZs, and ob solete machinery and equipment are not subject to the payment of duties.  
3.120.   The ZFM is essentially an industrial hub, producing mainly electronics, vehicles, chemicals, 
thermoplastics, mechanical machinery, metallurgical products, consumer goods, and watches . Its 
trade balance with Brazil remained in surplus , and that with the rest of the world was in deficit , 
throughout 2012 -16. ZFM residents purchased inputs mostly overseas, whereas their sales 
revenue was predominantly from the Brazilian market ( Charts 3. 5 and 3. 6). During 2013 -16, 
investments in the ZFM totalled US$37.2 billion. The ZFM employed on average 85,587  persons 
in 2016, down from 121,631 in 2013.163  
Chart 3.5 ZFM trade balance, 2012 -16 
-40.0-20.00.020.040.060.080.0
0102030405060708090
2012 2013 2014 2015 2016Chart 3.[]  Industrial Pole of Manaus, trade balance, 2012 -16
Exports abroadExports to BrazilLeft-hand scale:R$ billion R$ billion
Right -hand scale:Imports from abroadImports from Brazil
External trade balanceTrade balance with Brazil
[Source:    Ministerios da Industria,commercio exterior e servicos -Indicaodres de desempenho do polo 
industrial de manaus ...]
 
Source:  SUFRA MA, Indicadores de desempenho do polo industrial de Manaus  (March 2017).  
                                                
160 Law No. 2,826 (29  September 2003), as amended by Laws No. 2,879 (31  March 2004), No. 2,927 
(17 November 2004) and No. 3,022 (28  December 2005).  
161 SUFRAMA online information. Viewed at: http://www.suframa.gov.br/zfm_incentivos_estado.cfm  
[13 January 2017].  
162 The duty assessment m ethodology is defined in Decree No. 4,543 of 26  December  2002.  
163 SUFRAMA (2017), Indicadores de Desempenho do Polo Industrial de Manaus 2012 -2017. WT/TPR/S/358 • Brazil  
 
- 70 - 
 
  Chart 3.6 ZFM expenditure on inputs and sales revenue, 2012 -16 
0102030405060708090
2012 2013 2014 2015 2016Chart 3.[]  Industrial Pole of Manaus, expenditure on inputs and sales revenue, 2012 -16
R$ billion
Brazil (customs territory)
Regional (MERCOSUR)Expenditure on inputs :
InternationalBrazil (custom s territory)
Regional (MERCOSUR)Sales revenue:
International
[Source:    Ministerios da Industria,commercio exterior e servicos -Indicaodres de desempenho do polo 
industrial de manaus ...]
 
Source:  SUFRAMA, Indicadores de desempenho do polo industrial de Manaus  (March 2017).  
3.3.1.3   Federal financing facilities  
3.121.   The BNDES is the main entity providing federal financing to entrepreneurs in Brazil.164 The 
range of its operations includes tailored financing (often linked to an administered long -term 
interest rate (TJLP)), equi ty participation, non -reimbursable financial contributions, and 
guarantees. According to the authorities, the BNDES is alone in the Brazilian market for long -term, 
local-currency financing solutions , and its portfolio comprises mostly greenfield projects i n nascent 
industries that have no other source of financing. Support granted by the BNDES over 2013 -16 
totalled R$602.5  billion (Table  3.14), against R$601.5 billio n over 2009 -12 and R$255.2 over 
2005-08.  
Table 3.14 Brazilian development bank support, 2013 -16 
(R$ million)  
 2013  2014  2015  2016  2013 -16 
Agriculture  18,662.2  16,775.1  13,710.1  13,898.0  63,045.4  
Industry  58,015.5  50,065.5  36,877.7  30,141.3  175,100.0  
Infrastructure  62,175.0  68,951.7  54,896.9  25,90 7.4 211,931.0  
Trade/services  51,566.3  52,044.5  30,457.4  18,309.8  152,378.0  
Total 190,419.0  187,836.9  135,942.0  88,256.5  602,454.4  
Source:  Information provided by the Brazilian authorities.  
3.122.   BNDES activities are funded by returns on its operations; resour ces raised in foreign 
markets; a portion of all contributions to the FAT; and public funds provided by the Federal 
Government, its sole shareholder, either in the form of paid -in capital or debt instruments. At 
end-June 2016, government sources accounted f or 87.1% of BNDES's total capital, up from 84.9% 
in 2013. National Treasury resources in BNDES's total capital increased from 54.7% to 56.1% 
(R$524.9 billion) in that period.  
3.123.   The BNDES maintains a number of schemes that facilitate access to credit, either  directly 
or through accredited financial institutions. Projects eligible for financing include: implementation, 
expansion, and modernization of fixed assets; new machinery and equipment produced in Brazil 
and accredited by the BNDES; production of various  goods and services for export and their 
overseas commercialization ( Section  3.2.5); and working capital associated with a fixed 
investment. Indirect schemes (through the banking sector) represented some 55.3% of total 
financing granted over 2013 -16. The B NDES FINEM programme was the largest, accounting for 
38.2% of total disbursements, followed by the FINAME with 24.5 % (Table  3.15). In 2016, there 
were some 145,000 beneficiaries of BNDES financing, with projects in agribusiness, electricity and 
gas, trade and land transport accounting for the bulk of disbursements.165 
                                                
164 The Banco da Amazônia  (BASA) and the Banco do Nordeste do Brasil  (BNB) manage, inter alia , 
federally  funded  regional programmes.  
165 BNDES online information. Viewed at: 
http://www.bndes.gov.br/wps/portal/site/home/transparencia/transparencia  [19 April 2017].  WT/TPR/S/358 • Brazil  
 
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  Table 3.15 BNDES disbursements by credit scheme, 2013 -16 
(R$ million)  
Credit scheme  2013  2014  2015  2016  2013 -16 
Direct schemes  74,370.6  84,312.0  70,561.6  40,035.5  269,279.6  
BNDES FINEM  64,858.1  72,147.8  61,320.2  32,044.5  230,370.6  
BNDES -EXIM 5,591.6  5,790.6  5,620.1  6,037.3  23,039.5  
BNDES Não reembolsável  394.7  729.3  369.6  441.4  1,934.9  
BNDES Mercado de Capitais  3,526.2  5,617.8  2,947.3  1,361.4  13,452.8  
BNDES Microcrédito  - 26.5 304.3  150.9  481.8  
Indirect schemesa 116,048.4  103,524.9  65,380.5  48,221.0  333,174.8  
BNDES FINAME  58,133.7  53,855.5  24,882.8  10,592.4  147,464.4  
BNDES FINEM  11,298.3  11,381.0  8,485.8  3,238.9  34,404.1  
BNDES Automático  14,601.7  11,343.5  11,742.1  12,854.4  50,541.6  
BNDES FINAME Agrícola  12,171.4  10,814.8  7,824.4  7,085.8  37,896.3  
BNDES -EXIM 9,666.2  4,482.4  1,169.6  8,803.3  24,121.5  
BNDES FINAME Leasing  154.5  100.3  23.8 9.8 288.4  
Cartão BNDES  10,022.6  11,547.5  11,251.9  5,636 .5 38,458.5  
Total 190,419.0  187,836.9  135,942.0  88,256.5  602,454.5  
a Through the banking sector.  
Source:  Information provided by the Brazilian authorities.  
3.124.   BNDES financing is mainly provided to private companies with headquarters and 
administration in Br azil. Individual entrepreneurs and business associations in Brazil (e.g. cargo 
carriers, rural producers or micro entrepreneurs) are also entitled to financing, regardless of 
nationality. Eligibility for BNDES support is subject to few restrictions regardi ng operations: the 
negative list comprises banking/financial activities, weapons trade, establishments for adult 
entertainment, and gambling. Certain financial support mechanisms may focus on companies of a 
specific size or foster the development of a loca l supply chain. For instance, products with a 
domestic content of at least 60% (in value terms) are automatically eligible for financing under the 
Automatic and FINAME schemes, while products with local content below the threshold are subject 
to a non -automatic analysis procedure. According to the authorities, the BNDES reviews the 
eligibility criteria (including any local content/local production requirements) for its schemes and 
adapts them to changing market conditions.  
3.125.   Several BNDES schemes are operated  on an interest rate equalization principle, whereby 
resources from the National Treasury are used to cover the difference between the rate charged by 
the BNDES and that effectively paid by borrowers. During 2013 -15, disbursements under interest 
rate equal ization schemes totalled R$194.8 billion, representing 37.9% of total BNDES 
disbursements.166 The interest rates effectively paid by most borrowers under these schemes were 
particularly attractive:  63.3% of disbursements made were at rates not exceeding 5%, which was 
well below the annual rate of inflation (Table  1.2). According to the authorities, the bulk of 
disbursements  benefitting from  interest rate equalization  (R$191.6 billion ) were made under the 
Programme for the Sustainability of Investment (PSI) , which expired in 2015.167  
                                                
166 Ricardo de Men ezes Barboza, Gilberto Borça Jr. , Guilherme Tinoco de Lima Horta , João Marco Braga 
da Cunha , and Felipe Guatimosim Maciel , A indústria, o PSI, o BNDES e algumas propostas  (2017) , BNDES 
Discussion Paper 114.  
167 As at 31 December 2016, the stock of contracts concluded under the PSI that remained in force was 
R$133 billion. BNDES online information. Viewed at: 
http://www.bndes.gov.br/wps/portal/site/home/imprensa/noticias/conteudo/ tlp-substituir -tjlp-em-contratos -
do-bndes -firmados -a-partir -de-1-de-janeiro -de-2018/!ut/p/z1/zVRdb5swFP0te -
DRsQkfIZOmiXZo6UKUrQ1N4CUyxoAjsIntJNu_n2GdpnZto6mKNB4Mvro -
99zje4AZ3MCM4yOrsGaC48bs08zfxtN5NHOXKEbeykXhJ2fiJpMIzYMxXA8J6IUnRDB7dN5ObBTGzvw --
XZl30w9eA8 zmBGuO13DNOcFVVvGlWb6QAYGFqpFSy3E2k5SrrCFuNCMMKwsRATX9FAIC -mmA-qQD-
eYBHpn9rQFfYLEWihQCDCAg5LJFhcmgkGHpTbJBQV2v -
wwp0yK_nOM7KDn1RFWwNS1x45PEAEeIRS4nhsATHwMfBsFNvFwGZjs9Tmhstdl -
nJOKHMTY7m4XlSGFtY1YLwUcKNEIxXFktSGQfYYY3njRCicXceeG83tz1PnIeEVFqnpYvJyFw5cHxk9wYQ Lo2ID7_5R
pNm5CsvxGyucgfcuCz -5KLzrvhH -6Yz9NaPPz9glzGUqsd1 -n4XG_L2Lv2u4 -a_cb7SqGpH_ -
gWGPHcCI4qkJZVUjg7ShGutu_cWstDpdBoN8KNKHEe5NJHO8OuE1H0Himn6u4 -rgyKmiT -
u_bj_sIq_PlejFspo8hQbdm3SBs4PkOX -
bXBalXXVbheR4z28mmNcLrSXvvsJmk_xGw!!/dz/d5/L2dBISEvZ0FBIS9nQSEh/  [30 A pril 2017].  WT/TPR/S/358 • Brazil  
 
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  3.3.1.4   Research and development (R&D) programmes  
3.126.   Brazil's Scientific and Technological Development Fund ( Fundo Nacional de 
Desenvolvimento Científico e Tecnológico , FNDCT), created in 1969, remains a major source of 
financing for science, technology and innovation (S, T&I) projects. The Financiadora de Estudos e 
Projetos  (FINEP), a public enterprise linked to the MCTI, continues acting as the executive 
secretariat of FNDCT, with responsibility for accounting and administrative operations. F INEP also 
serves as financial agent for specific programmes funded by, inter alia , the National Treasury and 
the FAT.168 
3.127.   The FNDCT comprises 14 sectoral and 2 cross-cutting sub -funds, each with specific focus  
and with its own resources  (Table 3.16 ). While th ere cannot be any transfer of resources between 
sub-funds, they may jointly finance strategic projects. In administering the sectoral sub -funds , 
FINEP follows a regional policy: at least 30% must be invested in the north, north -east, and 
mid-west regions.169 According to the authorities, appropriations from the National Treasury 
constituted an insignificant share of overall FNDCT resources during 2013 -16. One notable 
exception was the provision of National Treasury resources for the Science without Borders 
(Ciência sem Fronteiras ) programme in 2015.  
Table 3.16 Sectoral science, technology and innovation (S, T&I) funds, 2017  
Fund/Law  Resources  
Petroleum and Natural Gas Fund (CT -PETRO),  
Law No.  9,478 of 6 August 19 97, amended by 
Law No.  12,734 of 30  November 2012  25% of the share of the value of royalties exceeding 5% of the 
production of petroleum and natural gas. As from December 2012, 
these resources are no longer channelled to CT -PETRO  
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 compen sation of electricity generation companies  
Land Transport Fund (CT -TRANSPORTE),  
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 communicati ons and telecommunications systems  
Mining Fund (CT -MINERAL),  
Law No. 9,993 of 24  July 2000  2% of the financial compensation of the mining sector  
Space Fund (CT -ESPACIAL),  
Law No. 9,994 of 24  July 2000  25% of federal revenues from space operations  
Inform ation Technology Fund (CT -INFO),  
Law No.  10,176 of 11 January 2001  0.5% of informatics enterprises' bills  
University and Enterprise Fund (CT -VERDE 
AMARELO),  
Laws No. 10,168 of 29  December 2000) and 
No. 10,332 of 19  December 2001)  50% of the CIDE, 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),  
Law No. 10,893 of 13 July 2004  3% of the AFRMM tax revenue accruing to  the Merchant Marine Fund 
(FMM)  
Amazon Fund (CT -AMAZÔNIA),  
Laws No. 8,387 of 30  December 1991 and 
No. 10,176 of 11  January 2001, and 
Decree  No. 4,401 of 1  October 2002  At least 0.5% of gross sales of ZFM residents that produce 
informatics -related goods an d services  
Biotechnology Fund (CT -BIO),  
Law No. 10,332 of 19 December 2001  7.5% of proceeds from CIDE  
Agri-business Fund (CT -AGRO),  
Law No. 10,332 of 19 December 2001  17.5% of proceeds from CIDE  
Aeronautical Fund, (CT -AERO),  
Law No. 10,332 of 19 Decembe r 2001  7.5% of proceeds from CIDE  
Health Fund (CT -SAÚDE),  
Law No. 10,332 of 19 December 2001  17.5% of proceeds from CIDE  
CT-INOVAR -AUTO,  
Laws No. 12,715 of 17 September 2012 and 
No. 12,996 of 18 June 2014  Accredited automakers' contributions (in place of  direct investments 
in R&D) or fines (for failure to meet established objectives). Valid 
until 31 December 2017  
Source:  Information provided by the Brazilian authorities.  
                                                
168 In addition, FINEP acts as one of the financial agents for the Telecommunications Fund ( Fundo para o 
Desenvolvimento Tecnológico das Telecomunicações , FUNTTEL), financed by telecommunications operators' 
contributions and dedicated exclusively  to the telecommunications sector's technological development.  
169 The only exception is the sub -fund for the Amazon region dedicated to financing activities in the 
states of Amazonas, Rondônia, Roraima, and Acre.  WT/TPR/S/358 • Brazil  
 
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  3.128.   FINEP finances Brazilian research institutions and companies active at every phase a nd 
dimension of the scientific and technological development cycle (e.g. basic research, applied 
research and technological innovation). It also provides financial support for the organization of 
conferences, seminars and fairs approved by the National Cou ncil for Scientific and Technological 
Development ( CNPq ).  
3.129.   FINEP support may take the form of repayable financing, non -repayable financing to 
non-profit institutions, grants ( subvenção econômica ) to enterprises, and investments in projects 
and companies.170 Repayable financing may be provided from both FNDCT and FINEP's own 
resources. FINEP accepts and analyses such applications continuously, whereas applications for 
non-repayable financing must be submitted in response to a public call for proposals. 
Non-repayable financing is funded from the FNDCT budget. It is made available to public 
universities, research centres, and non -profit institutions in program mes and areas determined by 
the FNDCT's steering committees.  
3.130.   FNDCT disbursements totalled R$7.9 billion over the 2013 -16 period. Significant shares of 
this amount were attributable to the CT -INFRA, CT -SAÚDE and CT -PETRO funds. Details on types 
of support provided and on the beneficiary projects/activities were not available.  
3.3.2   Standards and other technical req uirements  
3.131.   Brazil's legal and institutional framework related to the implementation and administration 
of the TBT Agreement remained broadly unchanged during 2013 -2016; no notifications pursuant 
to Article 15.2 of the TBT Agreement were received at the WTO during th is period.171  
3.132.   The National Council of Metrology, Standardization and Industrial Quality (CONMETRO) 
continues to oversee the National System of Metrology, Standardization and Industrial Quality 
(SINMETRO), which regroups public and private entities active in metrology, standardization, 
quality management, and certification at the federal and sub -federal levels. The National Institute 
of Metrology, Quality and Technology (INMETRO) continues serving as: CONMETRO's Executive 
Secretariat; the coordinator  of the Brazilian Network of Legal Metrology and Quality (RBMLQ -I); 
the regulatory and supervising authority for legal metrology and compulsory conformity 
assessment in the areas of security, environmental and health protection, and prevention of 
deceptive  trade practices172; and the national enquiry point and notification authority under the 
TBT Agreement.  
3.133.   The Brazilian Association for Technical Standardization (ABNT) remains in charge of 
developing (voluntary) standards. Besides CONMETRO and INMETRO, some 31 federal agencies 
are responsible for issuing technical regulations and determining conformity assessment systems 
in their respective areas of competence. Any of these competent agencies may request that 
INMETRO coordinate conformity assessment activitie s for a particular technical regulation.  
3.134.   Brazil's approach to granting equivalence remains based on the acceptance of test results, 
without explicit recognition of foreign technical regulations. During the review period, Brazil 
notified to the WTO four plu rilateral agreements on TBT matters concluded with other Members, 
including three new mutual recognition agreements (MRAs) on accreditation.173 Through INMETRO, 
Brazil is a party to some 120 TBT -related technical coope ration instruments, of which 
89 (includi ng 19 in the field of accreditation) are currently in force. INMETRO also represents Brazil 
at the Inter -American Accreditation Cooperation, the International Accreditation Forum, the 
International Laboratory Accreditation Cooperation, the International Bu reau of Weights and 
Measures, the International Organization of Legal Metrology, and in relevant initiatives within 
MERCOSUR, LAIA, and the Organization of American States.  
3.135.   As a member of MERCOSUR, Brazil participates in the elaboration, adoption and revi sion of 
common technical regulations; the relevant MERCOSUR proce dures remained unchanged 
                                                
170 Investments may be made either directly or  by way of venture capital and seed money funds . 
171 WTO document WT/TPR/S/283/Rev.1 , 26 July 2013.  
172 Provisional measure No. 541 of 2 August 2011, converted int o Law No. 12,545 of 
14 December  2011.  
173 WTO documents G/TBT/10.7/N/129 and 130 (30 June 2016), and G/TBT/10.7/N/131  and 132 
(1 July 2016). WT/TPR/S/358 • Brazil  
 
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  during  2013-2017.174 At the national level, CONMETRO's non -binding Guide on Good Regulatory 
Practices continues to frame, in principle, the elaboration, dissemination, periodic review, and 
elimination of technical regulations and conformity assessment procedures.175 Technical 
regulations may be established through laws, decrees, ordinances, normative instructions or 
resolutions, and should be published in the Official Jour nal. A period of six months is typically 
allowed between the publication of a 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 an d suggestions are taken 
into consideration, the competent ministry or agency decides whether to adopt the technical 
regulation, with or without modifications. According to the authorities, most technical regulations 
enacted in Brazil are based on internati onal standards or MERCOSUR regional standards; when this 
is not the case, they are based on performance criteria. The recommended period for review and 
revision of technical regulations is five years.  
3.136.   Generally, the process for adopting conformity assessm ent 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., certificatio n) may be delegated to accredited third parties. The supplier's 
declaration of conformity is an admissible instrument only for products or services of low to 
medium risk to human health and safety. In general, labelling requirements relate to the products'  
quality, quantity, composition, guarantee, shelf life, origin, and risks to consumer health and 
safety. All labels must bear this information in Portuguese and indicate the brand or name of the 
manufacturer.  
3.137.   As at 31 December 2016, INMETRO applied the fol lowing 148 compulsory conformity 
assessment procedures: certification (114 products and 10 services); conformity declaration by 
the supplier (16  products and 10  services); and inspection (6 products and 4 services). Additional 
compulsory conformity assessm ent procedures are administered by other competent entities, such 
as the Brazilian Health Regulatory Agency  (ANVISA ), the National Telecommunications Agency  
ANATEL , and MAPA. SISCOMEX (Section  3.1.1.), accessible only to registered users, contains the 
most up-to-date information on conformity assessment measures affecting imports.176  
3.138.   The marketing of products and services, which are both under INMETRO's authority 
(directly or through delegation) and subject to compulsory conformity assessment, is conditional  
on inscription in its Register of items.177 In addition, importers of products regulated by INMETRO 
must apply for an import licence through SISCOMEX and request its analysis for approval at 
INMETRO.178 Other regulatory agencies, such as ANVISA, MAPA and ANAT EL, may also require 
inscription in their respective registers.  
3.139.   INMETRO maintains a computerized system (Orquestra) for the management of its 
Register of items and its non -automatic import licensing activities.179 As at March 2016, 
INMETRO's Register contai ned 32,736 items, up from 13,002 in 2013. The total number of 
requests for analysis of an import licence rose from 197,326 in 2013 to 754,270 in 2016.  
3.140.   INMETRO's General Coordination of Accreditation (CGCRE) is Brazil's national accreditation 
body in the f ield of conformity assessment.180 It accredits entities engaging in certification, 
inspection, calibration, and testing. The accreditation process is managed online through Orquestra 
and comprises the submission of a formal request, a review of supporting do cumentation, and an 
in situ  assessment. Accredited entities are evaluated periodically. According to the authorities, 
                                                
174 WTO document WT/TPR/S/283/Rev.1 , 26 July 2013.  
175 CONMETRO (2007), The Brazilian Guide on Good Regulatory Practices . Viewed at: 
http://www. inmetro.gov.br/qualidade/guiaRegulamentacao.asp  [06 November 2016].  
176 An indicative list of compulsory conformity assessment procedures can be viewed at: 
http://www.inmetro.gov.br/ qualidade/rtepac/compulsorios.asp  
177 This requirement does not apply to products and services under the regulatory competence of other 
federal agencies. Items subject to pattern  approval by INMETRO are exempted.  
178 INMETRO Ordinance No. 18 of 14 January 20 16. 
179 The following fees apply: R$60.01 for analysis of licensing requests ; and R$60.01 and R$1,516.46 
for the inscription/renewal of products and services , respectively, in INMETRO's Register of items .  
180 Decree No. 7938 of 19 February 2013.  WT/TPR/S/358 • Brazil  
 
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  entities seeking accreditation to carry out compulsory conformity assessment activities are 
generally not required to have a permanent off ice in Brazil, but a few technical regulations 
stipulate it as a prerequisite.  
3.141.   As at  January 2017 , 382 calibration laboratories and 1,046 testing laboratories were 
accredited in Brazil. There were also 879 entities with active accreditations to perform co nformity 
assessments (certification, inspection, performance verification). Among the Brazilian -accredited 
entities, 10 laboratories and 4 certification bodies were located overseas.  
3.142.   The ABNT coordinates the consensus -based development of Brazilian standar ds, and 
represents Brazil in the ISO/IEC and in regional normalization for ums. It signed the WTO/TBT 
Code of Good Practice in 1995 and follows its Annex 3.181 Standards are elaborated by technical 
committees and sectoral standardization bodies; all intereste d parties are allowed to submit 
requests for new standards and to participate in the standardization work. At present, there are 
150 active technical committees. Draft standards are open to national consultation for 60 days. 
Once a consensus is reached amo ng all interested parties, the standard is published by the ABNT. 
Standards older than five years are reviewed to ensure 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.  
3.143.   As at March 2017, there were 7,815 standards in force in Brazil. Between  January  2013 
and January  2017, Brazil adopted 2,557 new standards, some 33% of which were adoptions of 
international (ISO/IEC) standards. Similar statistics on technical regulations were not made 
available. Between January 2013 and April 2017, Brazil made 193 regular notifications to the WTO 
Committee on Technic al Barriers to Trade, for the most part under Article 2.9 of the TBT 
Agreement. In only 12 of the notified cases (6.2% of the total) , the timeliness of the submission 
allowed for a comment period of 60 days or more, whereas in 21.7% of all cases the commen t 
period was less than 45 days.  
3.144.   Between January 2013 and January 2017, Brazil was asked to respond to four newly raised 
specific trade concerns at the Committee on Technical Barriers to Trade.182 During that period, 
Brazil also joined various delegations in raising 19 specific trade concerns.  
3.3.3   Sanitary and phytosanitary requirements  
3.145.   Brazil's institutional framework for sanitary and phytosanitary (SPS) protection has been 
altered somewhat since its last Review. In April 2015, the Ministry of Fisheries and Aquac ulture 
(MPA) was abolished and its competences were transferred to MAPA.183 Consequently, the 
responsibility for the protection of animal and plant health was consolidated at MAPA, with most 
relevant SPS controls of domestic production and international trad e being carried out by its 
Secretariat of Animal and Plant Health and Inspection (SDA). ANVISA, an autonomous body, 
retains regulation and surveillance responsibilities for the protection of human health, including the 
setting of maximum residue levels of pesticides.184 ANVISA and MAPA share regulatory and 
surveillance competences over certain vegetable products. Pre -marketing regulation and 
surveillance of in natura  food are the remit of MAPA.  
3.146.   The National Technical Commission on Biosafety (CTNBio), a multid isciplinary advisory 
body to the Federal Government, remains Brazil's authority for all activities involving genetically 
modified organisms (GMOs). Besides assisting in GMO policy formulation and elaborating relevant 
technical advice, CTNBio acts as the na tional certifying body for quality systems in biosafety and is 
the sole issuer of research authorizations and of commercial approvals for GMOs. Entities wishing 
to engage in any activity involving GMOs must obtain a certificate of quality in biosafety and a 
prior authorization from CTNBio.  
                                                
181 WTO documen t G/TBT/CS/2/Rev.14, 20 February 2008.  
182 WTO documents G/TBT/M/63 , 19 September 2014;  G/TBT/M/64 ,10 February 2015; G/TBT/M/66 , 
17 September 2015; and G/TBT/M/67 , 3 February 2016 . 
183 Law 13,266  of 5 April 2016.  
184 Besides coordinating the National Sanitary Su rveillance System and sanitary controls at Brazil's 
borders, ANVISA regulates health services, public health laboratories, and health -related products (including 
their advertising). It also monitors the prices of pharmaceuticals. ANVISA is connected to the  Ministry of Health 
through a management contract, which is renewed periodically.  WT/TPR/S/358 • Brazil  
 
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  3.147.   Following the MPA's abolition, Brazil's enquiry points comprise MAPA's Secretariat for 
International Relations of Agribusiness and ANVISA's Office of International Affairs. The Ministry of 
Foreign Affairs remains the nati onal notification authority for SPS matters. Brazil submitted 
515 notifications, including 1 emergency and 472 regular o nes, to the WTO between January  2013 
and April 2017. Approximately one fifth of the measures announced in regular notifications were 
based on international standards. As at the time of its previous Review, the majority of Brazil's 
notifications allowed for comment periods of less than 60 days and few envisaged a six -month 
period between publication and entry into force. According to the au thorities, comments from 
interested parties have generally been taken into consideration even after the stipulated deadlines.  
3.148.   Between January 2013 and January 2017, Brazil raised six new specific trade concerns 
related to various restrictions on its export s of beef and poultry at the Committee on Sanitary and 
Phytosanitary Measures.185 Brazil was also asked to respond to one specific trade concern by China 
regarding its implementation of a standardized international certificate for fish and fishery products 
exported to Brazil.186 
3.149.   In May 2015, the SDA elaborated its first Agricultural Defence Plan ( Plano de Defesa 
Agropecuária ) for the period 2015 -2020.187 The Plan envisages a number of actions, structured 
along five axes: cutting red tape; updating the legal frame work; strengthening strategic support 
(investigation, risk assessment and risk management); ensuring cost efficiency; and meeting 
various qualitative objectives. During the review period, the main SPS -related legislative 
developments and procedural changes  concerned: labelling requirements for animal products; 
overseas inspection procedures for recognition of equivalence (animal products); and trade 
facilitation improvements in the Brazilian Agricultural Surveillance System. As from January 2016, 
all commun ications between MAPA and CTNBio are carried out through an Electronic Information 
System (SEI), which has accelerated approval procedures. Plans are also under way to involve the 
SDA and ANVISA in Brazil's AEO scheme ( Section  3.1.1).  
3.150.   Competence for the ad option of SPS measures remains vested in ANVISA and MAPA. 
According to the authorities, both entities follow similar procedures for the adoption of SPS 
measures , which generally comply with guidelines issued by relevant international organizations. 
Under B razil's SPS system, 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 pub licized 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.188 Risk assessments for plant pests comply with 
International Plant Protection Convention  (IPPC) standards; i n 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 World 
Organisation for Animal Health (OIE) standards. Sanitary requirements are adopted after public 
consultations, which are publicized in the Official Journal  and notified to the WTO.  
3.151.   Brazil maintains a non -automatic licensing system for imports subject to SPS controls. In 
addition, the import ation of some of these products may require prior authorization, certification 
(for unrestricted commercialization or quality), and/or inscription in a register. Indicative lists of 
the goods controlled by the SDA and ANVISA upon importation are available online.189 Exports of 
most of these goods from Brazil are also subject to registration and/or authorization requirements. 
In principle, ANVISA and the SDA issue import and export licences and/or authorizations in their 
respective areas of competence directly  through SISCOMEX. In order to obtain a licence through 
SISCOMEX, importers of animal products must also request authorization from the SDA 
department (the Federal Inspection Service) in the Brazilian state where they are based, 
                                                
185 WTO documents G/SPS/R/73 , 15 January 2014; G/SPS/R/79 , 4 September 2015;  and G /SPS/R/82, 
7 June 2016.  
186 WTO document G/SPS/R/75 , 18 September 2014.  
187 MAPA online informati on. Viewed at: http://www.agricultura.gov.br/arq_editor/PDA2015_2020.pdf  
[17 October 2016].  
188 Generally, the cost of the risk analysis is borne by the Brazilian Government; however,  interested 
parties may choose to contract, at their own expense, an accredited analyst (university or laboratory).  
189 The products subject to SDA controls upon importation are listed by tariff line (NCM) in the Annex to 
Normative instruction No. 51 (7  November 2011), viewed at: http://www.agricultura.gov.br/animal/importacao  
[12 October 2016]. A similar (NCM) list of products controlled by ANVISA is available at: 
http://portal.anvisa.gov.br/registros -e-autorizacoes/produtos/impor tacao  [12 October 2016].  WT/TPR/S/358 • Brazil  
 
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  indicating , inter alia , the shipment's point of entry and destination.190 Authorizations for live 
animals and reproductive material are issued by SDA representations at the state level, as part of 
the overall import licensing and authorization formalities.191 Importers of controlled foo dstuffs, 
cosmetics, and pharmaceutical products must obtain 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 througho ut Brazil. Some of these products can 
only be imported after inscription in ANVISA's sanitary register.192 Pharmaceutical raw materials 
can only be imported by companies holding an authorization to operate in Brazil, issued by 
ANVISA.  
3.152.   Imports of plants and plant products are subject to documentary and inspection 
requirements that vary according to the product's intended use and its classification in one of five 
risk categories. 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; the classification of imported plant 
products is done by MAPA.193 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.194 The conformity of imports is verified at the border, either by the SDA or by accredited 
private compa nies.195  
3.153.   The prerequisites for the importation of products of animal (including aquatic animal) 
origin into Brazil include: recognition of the exporting country's sanitary inspection systems as 
equivalent to Brazil's; accreditation of the exporting establis hments; and approval of each 
establishment's products and labels.196 Each shipment to Brazil must be accompanied by a sanitary 
certificate issued by the exporting country's competent authorities , and carry approved labels or 
stamps. All imports of animal pro ducts and their sub -products are physically inspected at the port 
of entry, with samples taken for laboratory testing whenever necessary.197  
3.154.   Brazil maintains an Importation Alert Regime (RAI) targeting foreign establishments whose 
shipments of animal produc ts have been found to be non -compliant with Brazilian SPS 
requirements. Whenever an irregularity is detected and an exporter is placed under the RAI, the 
SDA carries out 100% physical inspections and laboratory testing of the 10 consecutive shipments 
(of all products) originating from that establishment.198 Should another irregularity be detected in 
the course of the 10 inspections, the establishment's licence to export to Brazil is suspended.199 If 
no sufficient evidence of corrective measures taken is receive d 30 days after notification of the 
exporting country's competent authorities, the SDA may revoke the establishment's accreditation. 
In case of recurrent serious irregularities, or if non -compliant shipments are detected from at least 
three establishments within 30 days, the SDA may suspend the accreditation of all similar 
establishments from that country or of the country as a whole.200  
                                                
190 SDA Ordinance No. 183 of 9 October 1998.  
191 MAPA online information. Viewed at: http://www.agricultura.gov.br/animal/importacao  
[13 October  2016].  
192 Products that require registration are listed in ANVISA Resolution RDC No. 278 of 
22 September  2005 (foodstuffs); ANVISA Resolution RDC No. 211 of  14 July 2005 (cosmetics) ; and ANVISA 
Resolution RDC No.  132 of 29 May 2003, as amended (pharmaceuticals).  
193 Law No. 9,972 of 25 May 2000 and Decree No. 6,268 of 22 November 2007.  
194 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).  
195 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 , 
28 November 2006 and addenda).  
196 The 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.  
197 In general, testing is 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.  
198 The 10 subsequent shipments must arrive at Brazilian points of entry that have adequate facilities for 
thorough inspection. Information on the establishments placed under the RAI and the possible points of entry 
for their shipments is published on MAPA's website: http://www.agricultura.gov.br/animal/importacao/regime -
de-alerta -importacao  [14 October 2016].  
199 To have the lice nce reinstated, the competent certifying authorities in the exporting country must 
provide detailed information on the measures taken to address the problem , and another 10 consecutive 
shipments from that establishment must successfully undergo thorough in spection and testing.  
200 SDA Ordinance No. 183 of 9 October 1998 and SDA Internal Norm No. 01 of 02 August 2016.  WT/TPR/S/358 • Brazil  
 
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  3.155.   Exporters of products of animal origin from Brazil must obtain accreditation ( habilitação ) 
for their target market, condit ional on a favourable official opinion ( parecer official ) by the SDA as 
to the applicant's documentary conformity and capacity to comply with any market -specific SPS 
requirements. A sanitary certificate must also be obtained from the SDA for each export 
shipment.201 
3.156.   Establishments that produce, import, or export fertilizers, as well as the products 
themselves, must be registered with MAPA. The Ministry also maintains a register of pesticides 
(AGROFIT), which incorporates relevant information from the Ministri es of Health and 
Environment.  
3.157.   Brazil prohibits the commercialization, including imports and exports, of hormonal 
substances with anabolic characteristics, unless intended for therapeutic or research use.202 The 
use of substances with anabolic hormonal prope rties 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.203  
3.3.4   Competition policy and price controls  
3.3.4.1   Competition policy  
3.158.   Since  the overhaul of Brazil's com petition regime204 in 2012, there have been no major 
changes during 2013 -16. The Administrative Council for Economic Defence (CADE) remains in 
charge of competition policy enforcement, including ex-ante merger control, investigation of 
anti-competitive condu ct, and administrative adjudication. Consumer protection remains the remit 
of the National Secretariat for Consumers (SENACON), whereas the Special Secretariat of 
Economic Monitoring (SEAE) is primarily responsible for competition advocacy, including issui ng 
advisory opinions on competition -related matters (e.g. in regulation, trade, and industrial policies), 
and sector -wide studies.205  
3.159.   CADE may initiate investigations ex officio  or on the basis of complaints from any 
person.206 Independently of CADE administr ative 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 competition authority itself and a civil 
court; however, the judicial system has the final say. Due to the pecu liarities of Brazil 's judicial 
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 injunctions that 
suspend the enforcement of CADE decision s involving the imposition of a fine require the deposit 
of the same amount in an account under judicial administration.  
3.160.   In 2013, CADE implemented a new settlement policy requiring the signatory of a 
cease -and-desist agreement to collaborate with the inves tigation, in addition to admitting and 
ending its anti -competitive conduct. The settlement policy foresees a reduction of the relevant fine 
according to the contribution provided during the investigation, which has resulted in increasing 
numbers of complet ed settlements and leniency agreements  (Table 3.17 ). In 2016, CADE 
strengthened merger notification criteria with the establishment of notification requirements for 
associative contracts.207 During 2013 -16, CADE also published guidelines on: its antitrust le niency 
                                                
201 Memorandum No. 15/2013/GAB/DIPOA of 06 February 2013. Viewed at: 
http://www.agricultura.gov.br/arq_editor/ file/Aniamal/dipoa/DE_%20HAB_MEMON%C2%BA15%202013_BOVI
NOS_AVES_SUINOS_MANUALDEPROCEDIMENTOS.pdf  [13 October 2016].  
202 MAPA Normative Instru ction No. 55 of 1 December 2011.  
203 MAPA Normative Instruction No. 17 of 18 June 2004.  
204 WTO Document WT/TPR/S/283/Rev.1 , 26 July 2013.  
205 As part of its mandate, the SEAE also provides advisory opinions to CAMEX on AD 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.   
206 Pursuant to Brazil's competition legislation, CADE may undertake ex officio  market -wide studies , 
which are consultative  and non-binding . There are no prescribed time -frames for the conclusion  of such 
studies . 
207 Resolution No . 17 of 18 October 2016. WT/TPR/S/358 • Brazil  
 
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  programme; cease -and-desist agreements for cartel cases; completion of mergers prior to 
approval (gun jumping); competition compliance programmes; and horizontal mergers.208  
Table 3.17 Competition enforc ement, 2013 -16 
 2013  2014  2015  2016  
Total complaints/requests  490 646 599 572 
Merger notification filings  377 423 404 389 
Reviewed  437 434 384 366 
Not reviewed  2 7 20 19 
Desisted  2 1 2 5 
Leniency applications  1 6 10 11 
Requests for advisory opinions /advance rulings  3 4 9 3 
Examinations and inquiries concluded  643 713 670 603 
Mergers  437 434 384 366 
Approved without restrictions  387 413 376 360 
Approved with restrictions  47 20 7 6 
Disapproved  3 1 1 0 
Abuse of dominance  22 40 23 11 
Restrictive p ractices  16 17 21 20 
Advisory opinions (in all areas)  .. .. .. 3 
Total administrative fines (R$ million) 492.0  3,321.7  286.9  196.6  
Number of civil court sentences 35 72 73 44 
Findings upheld (%)a 91 92 83 84 
Appeals (against 1st instance decisions)b 65 16 25 57 
Decisions reversed/amended on appeal  28 11 18 15 
.. Not available.  
a Indicates the share of civil court findings that upheld CADE's decisions in the total number of 
sentences for that year.  
b Number of second instance rulings (" acórdãos ") rend ered in the period.  
Source:  CADE.  
3.161.   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. The provision of public aid or any preferential tax treatment by the 
federal and sub -federal governments is also outside its scope. CADE and Brazil's specialized 
regulatory agencies have complementary competence in regulated sectors; the former has 
authority o ver competition -related matters, and the latter are competent to issue rulings on 
regulatory grounds. During 2013 -16, CADE concluded technical cooperation agreements with the 
National Cinema Agency (ANCINE), ANVISA , and the National Agency of Petroleum, Na tural Gas 
and Biofuels (ANP). CADE has not established a standing mechanism for the monitoring of 
"pay-for-delay" patent settlement agreements.  
3.162.   Brazil's competition legislation provides for a rule of reason approach (i.e. effects -based 
assessment) in the c onsideration of all concentrations and anti -competitive practices, including 
abuse of dominance.209 The authorities affirm that, in its assessments, CADE applies a consumer 
welfare standard, with top priority given to gains to consumers. 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.210 During 2013 -16, 
CADE issued eight administrative proceedings involving remed ies that explicitly mentioned the 
compulsory licensing of intellectual property rights.  
3.163.   Fines are the main sanctions imposable by CADE and civil courts for infractions of 
competition law. Under CADE's leniency programme, the first whistle -blower may receiv e full or 
partial administrative immunity (depending on the authorities' prior knowledge of the 
anti-competitive conduct) as well as freedom from prosecution. Later applicants receive a "marker" 
                                                
208 CADE online information. Viewed at:  http://www.cade.gov.br/acesso -a-informacao/publicacoes -
institucionais/guias_do_Cade/capa -interna  [17 January  2017].  
209 A dominant position is defined as having either the ability to unilaterally (including when a cting as a 
group) alter market conditions or control over at least 20% of the relevant market. CADE may, however, apply 
different market control thresholds for specific sectors.  
210 Previously, Brazil's competition legislation stipulated only the possibility  of compulsory licensing of 
patents (as opposed to intellectual property rights) held by the infractor.  WT/TPR/S/358 • Brazil  
 
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  position while discussions with the first applicant are ongoi ng, and can obtain monetary benefits 
(reduced fines). The leniency programme's scope includes violations of the antitrust legislation and 
other statutes, such as fraud, bid -rigging, and conspiracy.  
3.164.   Since 2013, CADE has investigated various cases of unilate ral conduct in the healthcare, 
pharmaceutical, financial services and gas markets. It has also investigated bid -rigging in public 
procurement related to infrastructure works, health products and services, and sub -contractor 
services. In addition, it has be en investigating cartels in the automotive industry (notably, the auto 
parts segment), the electronics industry, and in the distribution and resale of petroleum 
derivatives.  
3.165.   In the execution of competition advocacy functions, the SEAE has been actively eng aged in 
ensuring coordination on relevant topics among regulatory agencies. The SEAE also participates in 
technical discussions, in various formats, that support the work of CAMEX, including on tariff 
changes at MERCOSUR level. During 2013 -16, the SEAE iss ued some 300 -400 opinions per year in 
public hearings on regulatory amendments. Its interventions concerned the following main sectors: 
transportation (all modes), financial services, ports, energy, telecommunications, health and 
sanitary surveillance, urb an infrastructure, and natural resources.  
3.166.   Brazil has continued to strengthen and formalize its international cooperation efforts with a 
view to minimizing frictions arising from procedural or substantive differences between national 
competition regimes. C ADE has non -binding technical cooperation agreements with competition 
authorities from Argentina, Canada, Chile, China, Colombia, Ecuador, the EU, France, Japan, Peru, 
Portugal, the Russian Federation, the Republic of Korea  and the United States. In genera l, these 
cooperation instruments contain provisions on exchange of information (subject to the laws 
protecting confidential information in each jurisdiction), avoidance of conflicts, and 
confidentiality.211 Brazil is also an active participant in internation al for ums on competition policy, 
including the International Competition Network and the BRICS International Competition 
Conference, and in relevant work at the OECD and UNCTAD.  
3.3.4.2   Price controls  
3.167.   The consumer price index (IPCA) used in Brazil's inflation tar geting regime contains 
several goods and services whose prices are deemed insensitive to supply and demand 
fluctuations, because they have been determined in a long -established contract or set by a  public 
sector entity (Table 3.18 ). According to the IMF, i n 2016 regulated prices had a significant weight 
in the IPCA (some 25% of the basket), and therefore strong direct and second -round (via impact 
on production) effects on inflation.212 
Table 3.18 Regulated prices , 2017  
 Competent entity  
Regulated at the federal level   
Petroleum products. Gasoline, diesel, bottled cooking 
gas  PETROBRAS  
Residential electricity  National Agency for Electrical Energy (ANEEL)  
Fixed line telephone services (public concession and 
universal service)  ANATEL  
Healthcare plans  National Regulatory Agency for Private Health 
Insurance and Plans (ANS)  
Pharmaceutical products  Drug Market Regulation Chamber (inter -ministerial 
body)  
Gambling (lottery tickets)  Caixa Econômica Federal  (federal state-owned bank)  
Interstate bus service  National Transportation Agency (ANTT)  
Postal services (letters)  Empresa Brasileira de Correios e Telégrafos /MCTI  
Regulated at the sub -federal level   
Ship fares (public transport)  Government of the State of Pará  
                                                
211 In addition, criminal aspects of international competition enforcement would be framed by a number 
of bilateral Mutual Legal Assistance Treaties signe d by Brazil. The list of such agreements can be viewed at: 
http://www.justica.gov. br/sua -protecao/cooperacao -internacional/cooperacao -juridica -internacional -em-
materia -penal/acordos -internacionais/acordos -bilaterais -1 [16 April 2017].  
212 IMF (201 6), Brazil: 201 6 Article IV Consultation —Press Release;  Staff Report; and Statement by the 
Executive  Director for Brazil . IMF Country Report No. 16/348 . WT/TPR/S/358 • Brazil  
 
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   Competent entity  
Compressed natural gas (vehicle fuel)  State governments  
Subway  State governments  
Public transport: city bus fares, intercity bus fares, 
city train fares, ferry -boat fares  Municipalities  
Water and sewage fees  Municipalities  
Taxi fares  State governm ents  
Vehicle registration fees  State governments  
Notary services  State governments  
Piped cooking gas  Rio de Janeiro and São Paulo municipalities  
Road tolls  State governments  
Note:  The Central Bank of Brazil compiles this information for illust rative proposes only. It does not have 
any formal control over the respective polic ies. 
Source:  Central Bank of Brazil.  
3.168.   Although formally deregulated since 2002, consumer prices of refined petroleum products 
are de facto  fixed by the state -controlled PETRO BRAS, which dominates Brazil's refining and 
wholesale distribution ( Section 4.3.3). 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 by way of maximum manufacturer and consumer prices, which are adjusted 
annually. The timing and size of readjustment of the remaining regulated prices is at the d iscretion 
of the respective competent entities.  
3.169.   Certain agricultural products remain subject to minimum producer prices ( Section 4.2); 
according to the authorities, these prices are used as a tool to support producers and not the 
corresponding market pric es. 
3.3.5   State trading, state -owned enterprises, and privatization  
3.170.   In 2016, Brazil notified the WTO 's Council for Trade in Goods that it does not maintain any 
state trading enterprises (STEs) "that fall within the working definition of such enterprises."213 
Accor ding to the authorities, Indústrias Nucleares do Brasil  (INB), which holds the exclusive right 
to import and export nuclear material, does not qualify as an STE because all of its production is 
sold to a subsidiary of ELETROBRAS .214  
3.171.   The Federal Government s till controls a relatively large number of companies with 
commercial activities in a wide range of industries, including hydrocarbons, electricity, port 
services, financial services, transportation, telecommunications, and health services  (Table 3.19 ). 
Some federal state -owned enterprises (SOEs) continue to hold dominant positions in their 
respective markets (e.g. PETROBRAS in hydrocarbons trading and ELETROBRAS in electricity 
generation and transmission), and to have de jure  exclusive rights over certain a ctivities. In 
addition, there are many "public companies" owned or controlled by state and municipal 
governments; no information is available on their exact number.  
Table 3.19 Key features of federal state -owned enterprises (SOEs), 2017  
STE  State participation  Key features  
PETROBRAS ( Petroleo 
Brasileiro)  63.53% of voting shares  Continues to hold a dominant position (not an exclusive right) 
in hydrocarbon trading. Remains a de facto  price setter for 
petroleum  derivatives sold in Brazil. 
BR Distribuidora 
(PETROBRAS  
Distribuidora )  100% owned by 
PETROBRAS  Responsible for production and commercialization of petroleum 
derivatives, including export and import activities. Operates 
the largest network of fuel statio ns in Brazil.  
COBRA 
(Computadores e 
Sistemas Brasileiros ) 99.95% of shares owned 
by Banco do Brasil S.A ., 
majority owned by the 
National Treasury 
(50.73% of voting shares)  Deals with production and development of IT products, and 
provision of IT services.  Imports digital equipment. Does not 
have any exclusive rights.  
                                                
213 WTO document G/STR/N/16/BRA , 9 August 2016.  
214 WTO document WT/TPR/S/283/Rev.1 , 26 July 2013.  WT/TPR/S/358 • Brazil  
 
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  STE  State participation  Key features  
CONAB ( Companhia 
Nacional de 
Abastecimento ) 100%  Responsible for administering and carrying out certain 
agriculture policies, including those related to strategic 
storage, food supply, and mi nimum price guarantees. May 
import certain food products in exceptional circumstances, by 
decision of MAPA. 
CMB ( Casa da Moeda 
do Brasil ) 100%  Has exclusive rights over the manufacture of banknotes, coins, 
postal and fiscal stamps, and government bonds (L aw No. 
5,895 of 19 June 1973). Exports banknotes and other 
products, and imports raw materials, equipment, and other 
inputs. 
ELETROBRAS  75.1% of voting shares  Exports and imports electricity (not an exclusive right). Private 
companies authorized by ANEEL may also engage in these 
activities.  
National Center for 
Advanced Research in 
Electronics (CEITEC)  100%  Produces and commercializes semiconductors for the domestic 
and international market.  
Pré-Sal Petróleo S.A. 
(PPSA)  100%  Manages the commercialization  of the State's share of output 
produced under the production -sharing agreements for oil and 
gas. 
Source:  WTO Secretariat, based on information provided by the Brazilian authorities.  
3.172.   At end -2016, the Secretariat for Coordination and Control of State Enter prises (SEST) 
under the Ministry of Planning Development and Management reported the existence of 
154 majority government -owned enterprises at the federal level, up from 141 in 2013. These 
SOEs employed 549,240 people in 2016, down  from 550,029 in 2013 . According to SEST, some 
18 companies employing 69,764 people were dependent on Federal Treasury funding for their 
operations. Most of the top 10 performers among federal SOEs, in terms of both revenues and 
total assets, belonged to the PETROBRAS and ELETROBR AS groups of companies.215 In 2016, 
federal SOEs invested R$54.6  billion (0.9% of GDP), down from R$113.5 billion (2.1% of GDP ) 
in 2013.  
3.173.   According to the authorities, since 2013 there has been no privatization activity , and no 
new SOEs have been created. In  2016, Brazil amended the legal status of enterprises with public 
participation at any level of government, with a view to strengthening their governance and 
transparency, including in procurement operations.216 All such enterprises are required to comply 
with a set of mechanisms for internal control, transparency, and long -term strategic planning.  
3.3.6   Government procurement  
3.174.   Brazil is neither a party nor an observer to the WTO Plurilateral Agreement on Government 
Procurement (GPA). The Agreement on Economic and T rade Expansion between Brazil and Peru, 
signed in April 2016, contains a chapter on government procurement. Brazil is involved in ongoing 
negotiations on a MERCOSUR Public Procurement Protocol, as well as in FTA negotiations between 
MERCOSUR and the EU that also include a chapter on public procurement.  
3.175.   Brazil's decentralized system comprises independent procurement jurisdictions at all levels 
of government that share a common set of rules established by the Federal Government. Common 
elements are mainly set  out in the Tendering Law of 1993 , and include provisions on transparency, 
procurement methods, exemptions, and appeals.217 The common rules also apply to 
state-controlled enterprises (public enterprises and mixed companies) and at all levels of 
government, except those subject to specific procurement regimes established by the authorities 
in the respective jurisdiction of incorporation. At the federal level, a company -specific procurement 
regime, established by presidential decree, remains in place for PETRO BRAS.218 In 2016, a set of 
uniform rules and guidelines were adopted for procurement operations by enterprises with public 
participation at any level of government, as part of a broader initiative to strengthen their 
governance.219 PETROBRAS must adapt to the new framework by 30 June 2018.  
                                                
215 SEST (2017), Revista das Estatais . Viewed at: http://www.planejamento.gov.br/assuntos/empresas -
estatais/arquivos/revista -das-estatais  [20 April 2017].  
216 Law No. 13,303 of 30 June 2016.  
217 WTO Document WT/TPR/S/283/Rev.1, 26 July 2013.  
218 Procurement by  PETROBRAS must conform to the local-content requirements governing the oil and 
gas industry  (Section  4.3). 
219 Law No. 13,303 of 30 June 2016  and Decree No. 8,945 of 27 December 2016. WT/TPR/S/358 • Brazil  
 
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  3.176.   The obligation to tender may be waived under various provisions for exemption ( dispensa 
de licitação ) or non -applicability ( inexigibilidade ).220 State -controlled companies at any level of 
government are subject to specific waiv er provisions, which were redefined in 2016.221 These 
include an exemption from the requirement to tender for contracts concerning the company's core 
business activities. According to the Ministry of Planning, during 2013 -16 some 14,935 federal 
procurement c ontracts worth R$26.9 billion fell under exemption provisions; the corresponding 
figures for non -applicability clauses were 9,234 and R$28.9 billion. No data or estimates are 
available on exempted contracts at the sub -federal levels.  
3.177.   Brazil's legislation p rovides for the use of six procurement methods: open tendering 
(concorrência ); price consultation ( tomada de preços) ; invitation ( convite) ; competition 
(concurso ); public auction ( leilão ); and reverse auction ( pregão ). In general, the admissible 
procuremen t methods, and any requisite approvals, depend on the value and the nature of the 
object being tendered.222 Reverse auction, either electronic or onsite, is the main mode of 
awarding contracts for common goods and services.223 Over 99% of reverse auctions were  carried 
out electronically during 2013 -16.  
3.178.   Participating in electronic procurement proceedings requires a digital certificate compliant 
with the ICP -Brazil.224 To take part in national tendering, foreign suppliers must be legally 
established in Brazil. In the case of international tendering, foreign companies must have legal 
representation in Brazil or be associated with a Brazilian firm. International tendering is mainly 
used for procurement contracts funded by international institutions or cooperation age ncies, and 
follows the rules of the financing institution.  
3.179.   Brazil's procurement policy remains focused on obtaining the most advantageous offer, 
ensuring equality under the law, and promoting national sustainable development.225 In the 
awarding of contracts , preference may be given to goods and services: (i) produced in Brazil; 
(ii) produced or supplied by Brazilian companies; or (iii) produced or supplied by companies that 
invest in technology development in Brazil. The preferential treatment may include qu otas, 
preference margins, and tendering procedures completely restricted to small enterprises based in 
Brazil. Specific provisions regulate the preferences applicable to micro and small enterprises 
(MSEs), and to goods and services produced domestically in  accordance with Brazilian technical 
standards. According to the authorities, sub -federal jurisdictions cannot establish additional 
preferential treatment provisions.  
3.180.   The federal provisions for simplified differential treatment of MSEs apply to all levels of 
public administration, unless more favourable terms are stipulated in any sub -federal legislation or 
company/entity -specific regulations. Specifically, the contracting entity: must restrict the 
tendering of contracts worth up to R$80,000 to MSEs; may re quire sub -contracting to MSEs in the 
procurement of works and services; and must establish a quota of up to 25% for MSEs in the 
acquisition of goods of a divisible nature.226 
3.181.   The Inter -ministerial Commission for Public Procurement (CI -CP) remains in charge o f 
elaborating proposals detailing the eligibility criteria and recommended preference margins for 
specific types of domestically produced goods and services.227 These proposals must be approved 
by presidential decree. In its analysis, the CI -CP must take int o account various factors, including 
job and income generation, effect on tax revenues, and technology development and innovation 
performed in Brazil; preference margins may be up to 25%.228 As a general rule, national products 
are those produced in accordan ce with a PPB (Section  3.3.1.1 ) or with rules of origin established 
by the Federal Government, which must follow MERCOSUR minimum standards. National services 
are those supplied inside the Brazilian territory, under conditions to be determined by the 
                                                
220 Law No.  8,666 of  21 June 1993 . 
221 Law No. 13 ,303 of 30 June 2016 . 
222 The admissibility criteria for each procurement method  are set out in Laws No. 8,666 of  
21 June 1993 (Arts. 22 and 23 ) and No. 10,520 of 17 July 2002  (Art. 1).   
223 Decree No. 5,504 of 5 August 2005 .  
224 Decree No. 8,539 of 8 October 2015.  
225 Law No. 8,666 of 21 June 1993 , amended by Law No. 12,349 of 15 December 2010 . 
226 Supplementary Law No. 123 of 14 December 2006 , amended by Supplementary Law No. 147 of 
7 August 2014. 
227 Decree No. 7546 of 2 August 2011.  
228 Law No. 12,349 of 15 December 2010.  WT/TPR/S/358 • Brazil  
 
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  Gover nment.229 According to the authorities, the suppliers' origin is not among the criteria for 
preference eligibility. The preference margin is calculated on the basis of the lowest -price offer 
among those ineligible for preferential treatment.   
3.182.   Some 17 decrees  establishing public procurement preference margins, ranging from 8% to 
25%, for various national products were in force in Brazil during most of the period under review 
(Table 3.20). The product -specific preference margins applied to procurement contracts  at all 
levels of government, and were to be reviewed a t least once every five years. All but two of these 
decrees expired on 31 December 2016; one remained partially in force until 30 March 2017 and 
one was in force until 30 June 2017 .230 
Table 3.20 Product -specific preference margins in public tendering, 2017  
Main products  Preference margin  Decree No.  
Capital goods  20%, 15% + 5%  8,224 of 3 April 2014  
Chapters 61 and 62 of TIPI + 12 products  20%  7,756 of 14 June 2012  
Desktops, Notebooks, and printers  10% + 10%  8,184 of 17 January 2014  
Executive airplanes  9% + 16%  8,185 of 17 January 2014  
IT and communications equipment  15% + 10%  8,194 of 12 February 2014  
Locomotives, train wagons and parts  20%  7,812 of 20 September 2012  
Materials (HS  32) and equipment (HS  53) 8%, 15%, 20%, and 25%  7,767  of 27 June 2012 
(amended 16  August 2012)  
Medicines, pharmaceuticals, and 
biopharmaceuticals  8%, 20%, and 25% (with 
technological aggregation)  7,713  of 3 April 2 012  
Metal coin disc  20%  7,843  of 12 November 2012 
(amended 5  December  2012)  
Motor grader and backhoe  15% (backhoe); 25% (grader)  7,841  of 12 November 2012  
Network equipment  15% (normal); 10% (innovation 
stimulus)  7,903  of 4 February 2013  
Paper fo r printing paper money  20%  7,810  of 20 September 2012  
Software  0% + 18%  8,186 of 17 January 2014  
Toys 10%  8,823  of 3 April 2014  
Tractors, implements, and drills  15% (tractor); 20% (drill and 
implements)  7,840  of 12 November 2012  
Trucks, ambulance  wagons, and trailers  17% (trucks); 15% (ambulance 
wagons); 14% (trailers)  7,816  of 12 November 2012  
Wheel loaders, caterpillar tractors, and 
related products  15%, 20%, and 25%  8,002  of 14 May 2013  
Source:  Ministry of Planning, Development and Managem ent online information. Viewed at:  
http://www.comprasgovernamentais.gov.br/gestor -de-compras/legislacao -por-assunto#margem .  
3.183.   Besides applying the e stablished preference margins, contracting entities may restrict 
certain procurement tenders to goods and services developed in Brazil and produced in accordance 
with a PPB. The eligibility restriction may be applied to contracts for the implementation, 
maintenance, and development of information and communications systems defined as strategic 
by the Government.231 Currently, the measure may be used in tendering procedures under the 
National Broadband Programme (PNBL).232  
3.184.   In August 2011, the Government establi shed 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.233 Subsequent amendments made it possible to apply this 
special regime to the  procurem ent of infrastructure works included in the Government's Growth 
Acceleration Program (PAC), and to works and engineering services for the Unified Health System 
(SUS), as well as to cases related to public security and to activities of S, T&I  entities. Stat istics on 
the application of this regime were not available.  
                                                
229 Decree No. 7,546 o f 2 August 2011.  
230 Decree No. 7,767 of 27 June 2012 was in force until 30 June 2017; no information about its possible 
renewal was available at the time of writing. The last renewal of all other decrees' validity terms was set out in 
Decree No. 8,626 of 30  December 2015.  
231 Law No. 12,349 of  15 December 2010 . 
232 Decree No. 7,175 of  12 May 2010 . 
233 Law No. 12,462 of 4 August 2011.  WT/TPR/S/358 • Brazil  
 
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  3.185.   In 2016, procurement expenditure by federal public administration bodies (excluding 
SOEs) totalled R$16.2 billion, down from R$32.6 billion in 2013. Federal procurement expenditure 
declined marke dly from 2015 onwards (Table  3.21). Some 47.5% of procurement contracts were 
for the supply of goods , and 52.5% were for the provision of services. Information on procurement 
contracts awarded to foreign suppliers is not available due to the fact that all suppliers established 
in Brazil, regardless of ownership, are treated as national suppliers.  
Table 3.21 Federal administration procurement, by methods, 2013 -16 
  2013  2014  2015  2016  
Total (R$ million)  32,649. 0  56,002.7  18,059.4  16,220.7  
 (% of total)  
Reverse auction  84.2 94.9 92.2 94.9 
Open tendering  14.7 4.2 6.8 4.6 
Price consultation  1.0 0.6 0.8 0.5 
Invitation  0.04 0.02 0.02 0.02 
International tendering  0.04 0.25 0.06 0.01 
Competition  0.01 0.03 0.02 0.01 
Note:  The figures do not include procurement by federal SOEs.  
Source:  Ministry of Planning, Development and Management online information. Viewed at: 
http://paineldecompras.planejamento.gov.br/QvAJAXZfc/opendoc.htm?document=Painel%20de%20
Compras.qvw&host=Local&anonymous=true  [17 January 2017].  
3.186.   Data collected by the federal authorities do not include public ex penditure at the state and 
municipal levels, due to Brazil's decentralized procurement system. The OECD estimates overall 
public procurement expenditure at 8.2% of Brazil's GDP in 2014, with spending by the federal, 
state and local governments amounting to  1.8%, 2.8% and 3.6% of GDP, respectively.234  
3.3.7   Intellectual property rights  
3.3.7.1   Overview  
3.187.   Brazil's legislation covers all the major aspects contained in the TRIPS Agreement. In some 
areas, including copyright, Brazil grants rights that exceed the minimum terms la id down in the 
Agreement. During the period under review , there have been several legislative changes affecting 
the protection of intellectual property (Table  3.22). Brazil's responses to the checklist of issues on 
enforcement date from 2000 , and its legis lation was reviewed by the TRIPS Council in 2001.235 
Brazil has not provided notification updates with respect to changes in legislation since 2001. The 
body of legislation that has not been notified to the TRIPS Council includes the laws on: integrated 
circuit topographies; collective management of copyright (amendment); access to and benefit 
sharing of genetic resources and associated traditional knowledge; and principles, guarantees, 
rights and obligations for the use of Internet in Brazil.236  
3.188.   As of January  2017, Brazil was a party to 14 out of the 26 treaties administered by the 
World Intellectual Property Organization (WIPO), having ratified the Marrakesh VIP Treaty in 
December 2015.237 According to the authorities, the process for domestic ratification of t he Madrid 
Protocol is under way.  
3.189.   Brazil's institutional framework for intellectual property rights (IPRs) has not changed 
significantly during the period under review. Policy formulation in the area of industrial property is 
the responsibility of the MDIC,  whereas that related to copyright is the remit of the Ministry of 
Culture. The National Industrial Property Institute (INPI) administers the industrial property 
system. The collective management of copyright is carried out by several associations: the Cen tral 
Bureau for Collection and Distribution (ECAD); Associação Brasileira de Música e Artes ; Associação 
de Músicos; Arranjadores e Regentes ; Associação de Intérpretes e Músicos, Sociedade Brasileira 
                                                
234 OECD (2016), Government at a Glance: Latin America and the Caribbean 2017 . Viewed at: 
http://www.oecd -ilibrary.org/deliver/4216341e.pdf?itemId=/content/book/9789264265554 -
en&mimeType=application/pdf .  
235 WTO Document s IP/Q/BRA/1, IP/Q2/BRA/1, IP/Q3/BRA/1, IP /Q4/BRA/1 , 24 February 2004.  
236 Laws No . 11,484 (31  May 2007),  No. 12,853 (14 August 2013),  No. 13,123 (20  May 2015), and 
No. 12,965 (23  April 2014).  
237 WIPO online information. Viewed at : 
http://www.wipo.int/treaties/en/ShowResults.jsp?country_id=23C . WT/TPR/S/358 • Brazil  
 
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  de Autores, Compositores e Escritores de Música ; Sociedad e Independente de Compositores e 
Autores Musicais ; Sociedade Brasileira de Administração e Proteção de Direitos Intelectuais ; União 
Brasileira de Compositores ; Associação Brasileira de Autores, Compositores, Intérpretes e Músicos ; 
Sociedade Administradora de Direitos de Execução Musical do Brasil ; Associação Brasileira de 
Direitos de Autores Visuais ; and Associação Defensora de Direitos Autorais . ECAD is the sole entity 
responsible for collecting and distributing public performance royalties.  
Table 3.22 National IPR legislation, 2017  
Subject/Law  Coverage  Duration  Exclusions and 
limitations  Remarks  
Patents  
Industrial Property 
Law No. 9,279 
(14 May 1996), 
amended by 
Law No. 10,196 
(14 February 
2001)  
Law No.  13,123 
(20 May 2015)  Any invention that is 
new and involves an 
inventive step and is 
capable of industrial 
application.  20 years from 
date of filing.  At 
least 10 years of 
effective patent 
protection is 
granted if more 
than 10 years 
have passed 
between the 
application's filing 
and the granting 
of the patent.  
 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 ; surgical 
techniques and 
methods; computer 
programmes per se. 
Compulsory licences 
may be granted in 
cases of anti -
competitive 
behaviour, national 
emergency or in 
public interest.  Law No. 10,196/2001 : 
prior approval from ANVISA 
for granting patents for 
pharmaceutical products 
and processes.   
Decree  No. 4,830/2003 
regulates the granting of 
compulsory licences.  
Law No. 13,123/2015 
regulates access to and 
benefits sharing of genetic 
resources and associated 
traditional knowledge.  
Industrial designs  
Industria l Property 
Law No. 9,279 
(14 May 1996)  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.  60/2013 
transposes the 
international classification 
system.  
Normative Instructions 
No. 44/20 15 and No. 
45/2015 establish the 
conditions for the 
registration of industrial 
designs.  
Utility models  
 New invention in a 
new shape or 
arrangement, 
capable of industrial 
application.  15 years from 
date of filing.  Substances, 
materials, mixtures 
or produ cts of any 
kind, and processes 
for their modification, 
when resulting from 
the transformation of 
the atomic nucleus; 
biological processes 
and natural living 
material.  Resolution  No. 85/2013 
regulates the processing of 
applications.  
Trade marks       
Indus trial Property 
Law No. 9,279 
(14 May 1996)  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.  Resol ution No.  23/2013 
establishes rules for the 
recognition of famous 
marks.  
Resolutions  No. 34/2013 
and No. 35/2013 transpose 
the international 
classifications of products 
and services, and of 
figurative elements.  WT/TPR/S/358 • Brazil  
 
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  Subject/Law  Coverage  Duration  Exclusions and 
limitations  Remarks  
Geographic indications  
Industrial Property 
Law No. 9,279 
(14 May 1996)  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.  Normat ive Instruction 
No. 25/2013  establishes 
the conditions for 
registration of geographic 
indications.  
Copyright and related rights  
Law No. 9,610 (19 
February 1998), 
amended by Law 
No. 12,853 
(14 August 2013)  
Law No. 9,609 (19 
February 1998)  
Law No. 10,695 
(01 July 2003)  
Law No.  12,965 
(23 April 2014)  Text of literary, 
scientific or artistic 
works;  musical 
compositions, 
audiovisual works, 
drawings, paintings, 
photographic works, 
sound recordings, 
broadcasts; data 
bases. 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 is in one 
copy of s hort extracts 
from a work for the 
private use of the 
copier, provided that 
it is without intent for 
financial gain. 
Temporary 
reproduction is 
excluded from the 
concept of exclusive 
rights.  Law No. 10,695/2003 
amends the Criminal Code 
to include stiffer san ctions 
for copyright violations and 
to improve criminal 
procedures.   
Law No. 12,853/2013 and 
Decree No.  8,469/2015 
regulate the collective 
management of copyright 
and related rights.  
Normative Instruction 
No. 4/2015 regulates 
arbitration and mediation 
by the Ministry of Culture.  
Computer software  
Law No. 9,609 of 
19 February 1998  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 Instruction 
No. 11/2013 establishes 
the conditions for 
registration of computer 
software.  
New plant varieties  
Plant Variety 
Protection Law 
No. 9,456 
(25 April 1997)  New plant varieties 
and derived plant 
varieties of any  
genus or species.  15 years from 
the granting 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 a variety  
essentially derived from 
species whose descriptors 
have been published in the 
Official Gazette.  
Layout designs of integrated ci rcuits  
Law No. 11,484 
(31 May 2007)  Protection of layout 
designs of 
integrated circuits.  10 years from 
application.   Normative Instruction 
No. 10/2013 regulates the 
submission and processing 
of applications.  
Undisclosed information  
Law No. 10,603 
(07 D ecember 
2002)  
Industrial Property 
Law No. 9,279 
(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 undisc losed 
information.  10 years for 
products that use 
new chemical or 
biological 
entities, five 
years for all 
others.  Authorized use by 
ANVISA.  Law No.  9,279/1996 
protects against unfair 
commercial use of the 
information and data 
presented to the authorities 
for commercial approval.  
Source:  WTO Secretariat, based on information provided by the National Industrial Property Institute ( INPI), 
World Intellectual Property Organization (WIPO) , and WTO documents.  WT/TPR/S/358 • Brazil  
 
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  3.3.7.2   Industrial property  
3.190.   Industrial property contracts need to be registered at INPI in order to have effect for third 
parties, enable the remittance of royalties and licence fees, and qualify for income tax deductions. 
During the period under review, Brazil has taken steps to streamline the submission and 
examin ation of applications for various forms of industrial property protection, including patents 
and trademarks. Procedural innovations included: the implementation of a system for simplified 
electronic filing238 and WIPO's Industrial Property Automation System (trademark applications) ; 
fast-track examination initiatives (e.g. for "Green Patents", and applications by micro -enterprises 
and the disabled); publication of examination guidelines (patents and trademarks); and a 
productivity incentive programme for exam iners.  
3.191.   In the area of bilateral cooperation, in January 2016 INPI and the US Patent and 
Trademark Office launched a pilot programme under the Patent Prosecution Highway (PPH) 
initiative, which enables patent applicants to request accelerated processing at the national phase, 
on the basis of the work carried out by the partner country's patent office. Similar work -sharing 
pilot programmes are being negotiated with the European Patent Office and the Japan Patent 
Office.  
3.192.   Since 2012, INPI been participating in  PROSUR, a project focused on cooperation among 
industrial property offices in several Latin American countries.239 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 t he participating countries, such as centralized search in interconnected databases; 
(iii) database interconnection; and (iv)  collaborative examination of patent applications.240 
Negotiations on  the terms of a  PPH among PROSUR participants are ongoing , and th e launching of 
a pilot project is expected to take place in 2017.  
3.193.   Cutting down processing delays and reducing the existing backlog of applications has 
become a priority for INPI, which has been criticized for poor performance that may be hampering 
technolo gical innovation. Although annual applications outpaced INPI decisions across most types 
of industrial property protection in 2013 -14, there were some signs of this trend's reversal, 
notably for trademarks in 2015 -16 ( Chart 3.7). Nevertheless, in De cember 2016 some 
243,820  patent applications awaited decision at INPI , and the average processing time was 
estimated at 11 years .241  
Chart 3.7 Industrial property applications and decisions, 2013 -16 
345345345345
2013 2014 2015 201601,0002,0003,0004,0005,0006,0007,0008,0009,00010,000
12121212
2013 2014 2015 2016020,00040,00060,00080,000100,000120,000140,000160,000180,000200,000Chart 3.[INP]  Industrial property applications and decisions, 2013 -16
Source:  National Industrial Property Institute (INPI).67676767
2013 2014 2015 201602468101214
n.a. n.a. n.a. n.a.
Number of 
decisions:2Patents1Trademarks7Integrated circuit layout -designs
6Geographical indications5Computer programmes
4Technology transfers3Industrial designs
Decisions granting registrationNumber of applications:n.a.  not applicable
 
Source:  INPI. 
                                                
238 Launched in March 2013, the electronic system accounted for 44% of filings made in 2014, 86% of 
those made in 2015, and 93% of those made in 2016.  
239 Besides INPI, PROSUR participan ts include the industrial property offices  of: Argentina, Chile, 
Colombia, Costa Rica,  Ecuador, Paraguay, Peru, Suriname, and Uruguay.  The industrial property offices of the 
Dominican Republic and Nicaragua have also signalled their intention to join.  
240 The cooperation agreement establishing PROSUR was signed in Santiago, Chile, on 5 July 2012.  
241 The backlog assessment methodology takes into account final decisions carried out by patent 
examiners and the Board of Appeals within INPI.  WT/TPR/S/358 • Brazil  
 
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  3.194.   Decisions by 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 i nitiated ex officio  or 
by interested third parties, must start within six months after the granting of the patent. Judicial 
procedures for nullification may be initiated ex officio  or by interested third parties any time. 
During the review period, most app eals of INPI decisions related to patents, utility models and 
trademarks.242 
3.195.   Parallel imports of goods embodying IPRs covered by the Industrial Property Law are not 
allowed. Where the characteristics of a good are altered in such a way as to jeopardize or to  make 
impossible its identification, it may be seized ex officio  by customs authorities, in the case of either  
importation or exportation. The holder of an IPR of any type may request a judicial order for the 
suspension by the customs authorities of the re lease of goods into free circulation.  
3.196.   In the case of patents, compulsory licences may be granted for reasons of national 
emergencies and public interest243, as a remedy for an abuse of rights or anti -competitive conduct, 
and for failure to meet the needs of the market. If a compulsory licence is granted in the public 
interest, it must be for non -commercial public use. A patent will be forfeited if abuse or misuse has 
not been remedied within two years after the granting of the first compulsory licence, unless  there 
are justifiable reasons.  
3.197.   Compulsory use of protected information is possible in specific cases, such as public 
interest or anti -competitive behaviour. There are no compulsory licensing provisions for industrial 
designs in Brazil's legislation.  
3.3.7.3   Copy right  
3.198.   The protection granted to copyrighted works is independent of registration.244 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 Fed eral University of Rio de Janeiro; 
the Council of Architecture and Urbanism ; or INPI (software). Being of declaratory nature, the 
registration does not confer a right but provides a presumption of authorship, which may be 
helpful in judicial procedures.  
3.199.   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 subject is not presently availa ble, since there is no final 
decision by higher courts on the issue. Under Brazilian law, copyright holders may initiate 
procedures for the prosecution of importers of pirated goods.  
3.200.   During the review period, Brazil updated its legislation on the collecti ve management of 
copyright and related rights , and created a Permanent Commission for the Improvement of 
Collective Management (CPAGC).245 Brazil also adopted a civil rights framework for the Internet, 
which foresees the elaboration of specific legislation r egulating the liability for damages resulting 
from content managed by third  parties.246 
3.3.7.4   Enforcement  
3.201.   During the period under review, Brazil introduced penalty provisions for infractions in the 
collective management of copyright and related rights, and in the benefit sharing of genetic 
resources and associated traditional knowledge.247 Other civil and criminal penalty provisions in 
Brazil's legislation for violations of industrial property, copyright and related rights remained 
                                                
242 Statistics on adminis trative and judicial  appeals can be viewed at: www.inpi.gov.br/noticias/em -
reuniao-da-mei-presidente -do-inpi-apresenta -dados -de-produtividade -e-cenario -
operacional/INPI_Relatorio_p_CNOIMEI_30set2016.pdf  [20 April 2017].  
243 Decrees No. 4,830 (4 September 2003) and No. 3,201 (26 November 1999) regulate the granting of 
compulsory lice nces in cases of national emergency and public interest.   
244 Law No. 9,610  of 19 February 1998. 
245 Law No. 12,853 of 14 August 2013, Decree No. 8,469 of 22 June 2015  and Ordinance No. 53 of 
7 July 2015.  
246 Law No.  12,965 of 23 April 2014.  
247 Decree s No. 8,469 of 22 June 2015 and  No. 8,772 of 11 May 2016. WT/TPR/S/358 • Brazil  
 
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  unchanged. Criminal penalties are s tipulated for infringements related to all categories of IPRs, 
except protected plant varieties.248  
3.202.   The Federal Customs Service remains in charge of inspecting and seizing shipments at the 
national border.249 The use of border measures must generally be reque sted by the rights holder, 
who must provide adequate evidence to satisfy the customs authorities. However, in cases of 
counterfeiting of the coat of arms or national official badges of any country, the Customs Service 
has the authority to initiate represen tation for criminal purposes.250 The Customs Service may 
request that the rights holder provide a guarantee in an amount sufficient to safeguard the alleged 
infringer and avoid abuses. If procedures are not initiated within 10 days of the retention, the 
Customs Service releases the goods. Information and statistics on enforcement actions taken 
during the review period were not made available.  
 
                                                
248 WTO Document WT/TPR/S/283/Rev.1 , 26 July 2013.  
249 Decree No. 6,759  of 5 February 2009 (Arts. 605 to 610 ). 
250 Law No.  9,279  of 14 May 1996 (Art. 191). WT/TPR/S/358 • Brazil  
 
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  4  TRADE POLICIES BY SE CTOR  
4.1.  Since its previous TPR, Brazil maintained the broad scope of its sectoral trade policies ha ve 
remained relatively unchanged. Notwithstanding regulatory and institutional changes undertaken 
in certain activities, inter alia , driven by public expenditure tightening due to the recent economic 
slowdown, government intervention through border and dom estic support continues to distort 
competition and thus resource allocation in several areas. Certain activities remain characterized 
by market concentration, dominant state involvement or other competitiveness -constraining 
structural weaknesses, whereas s upport is marked by the multiplicity of relatively complex tax and 
non-tax measures, including administered interest rate and/or concessional loans, at federal 
and/or state level conditioned by production step -related local content requirements 
(e.g. manuf acturing and hydrocarbons) .1 
4.2.  Brazil remains a major player in the global trade of certain agricultural commodities. During 
the review period, the agricultural sector's share in gross value added (5.5%, 2016) remained 
relatively stable, and labour productiv ity seemingly low, compared to the rest of the economy. The 
average MFN tariff for agricultural products (10.2%) remains unchanged and the 55% peak rate 
affects only desiccated coconuts. Although it continues to provide a low and decreasing level of 
suppor t to its agricultural producers  compared with other countries , Brazil maintains several 
domestic support measures, including administered interest rate and concessional credit lines 
(e.g. under the equalization principle), price support mechanisms and crop  insurance premium 
support to which emphasis has lately been shifted. Mandatory bank reserve requirements for the 
financing of agricultural activities remain in place. The high level of rural debt remains a major 
challenge which is being addressed. A state  trading company remains involved in the operation of 
some agricultural policy measures (e.g. storage and minimum price guarantees).  
4.3.  The manufacturing sector remains large (11.7% of gross value added, 2016) albeit slightly 
declining, and diversified. Activ ities are either thriving or facing hard times, partly because of their 
weak integration into the world economy (e.g. the automotive industry) as several structural 
issues, including the so -called "Brazil cost", continue to affect the sector's competitiven ess. A 2016 
More Productive Brazil initiative is aimed at implementing lean manufacturing principles to raise 
productivity levels. The average MFN applied tariff for manufacturing products (11.8%) remains 
virtually unchanged; clothing, textiles, and transp ort equipment continue to benefit from the 
activity's highest tariff protection (35%), the main tool of an apparent tariff -jumping policy to 
attract FDI.2 In addition to several export incentives, remission of duties and taxes on exports 
under the Reintegr a scheme, originally due to expire at end -2013, were made permanent. 
Domestic support in the form of tax and other non -tax incentives, including administered interest 
                                                
1 Concessional loans are defined as those extended on terms substantially more generous than market 
loans. The concessionality is achieved either through interest rates below those available on the market or by 
grace periods, or a combination of these (OECD online glossary. Viewed at: 
https://stats.oecd.org/glossary/detail.asp?ID=5901 ). Concerning the term concessional loans , which is 
commonly used in TPR reports, the authorities consider that no such loans are granted in Brazil. They indicated 
that the "all -in" interest rate charged on most loans consists of the state -owned development bank 's (National 
Bank for Economic and Social Development – BNDES) cost of funds (i.e. a composition between the 
administered long -term interest rate (TJLP ( Section 3. 2.5)) and another market -based interest rate (e.g. the 
Central Bank 's SELIC interest rate or charges related to a basket of currencies) plus BNDES' margin plus a risk 
spread and applicable fees. The TJLP , the interest rate at which BNDES pegs its loans , is determined by the 
National Monetary Council (CMN) ( Section 4.5.3) and is released by the last working day of the quarter 
immediately before its effective date. The TJLP is calculated using the following parameters: (a) the expected 
rate of inflation calcu lated pro rata for twelve months following the first month of the rate, based on the annual 
forecast adopted by CMN; and (b) medium - to long -term risk assessment of the country. BNDES' margin is 
deemed to compensate its operational costs while the risk spr ead charged varies according to the project and 
client's risk. BNDES is by far the most significant provider of long -term local currency financing in Brazil, and is 
responsible for supporting corporate investments, as well as infrastructure projects. Accor ding to the 
authorities , Brazil has no equivalent private credit and capital market for long -term financing with respect to 
the terms and volumes to address demand for such loans. Consequently, the authorities consider that there is 
no comparable proxy to establish whether these loans are granted under  more favourable condition s or qualify 
as a subsidy; they are of the view that terms such as "subsidi zed", "concessional", "preferential" or 
"favourable" are inappropriate to describe the long -term credit line s. More information and data on interest 
rate developments in Brazil are found in Table 1.2 and Section 4.5.3.1 of this report. Furthermore, the 
authorities indicated that production step requirements cannot be equated to local content requirements , as 
well as that reference to local content requirement s is unwarranted.  
2 The authorities consider that there is no such policy to attract FDI as , according to UNCTAD , Brazil is 
among the top FDI receiving countries.  WT/TPR/S/358 • Brazil  
 
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  rate or concessional loans, rental subsidies and temporarily expanded government procurem ent 
preferences to local suppliers (until  2016 and 2017) , remains in place. Production step -related 
local content requirements tied to domestic support measures continue to shield domestic 
producers from foreign competition. Industry -specific incentives fo r some sectors, including 
automotives (INOVAR -Auto, until 2017), information technology, aeronautics, fertilizers and 
pharmaceuticals, were continued. Action was taken to reduce tariffs of cell -powered and electric 
cars, while the duty -free treatment of mo tor vehicles from Argenti na and Mexico was delayed 
until 2019.  
4.4.  Brazil, a net exporter of crude oil with one of the greenest energy matrixes in the world, 
remains nearly self -sufficient in primary energy production. Its Ten -Year Plan for Energy 
Expansion  2024, inter alia , aims at raising the share of renewable sources in the energy matrixes. 
The state -controlled PETROBRAS has maintained its dominant position both in the upstream and 
downstream hydrocarbons activities. To address fuel sales -related financial losses, in 2016 
PETROBRAS, a price setter in the domestic fuels market, implemented a new pricing policy for 
gasoline and diesel at the refinery gate. Tax incentives for oil and gas exploration and production 
remain in place while local content rules and t he requirement for a minimum 30% stake of 
PETROBRAS in pre -salt fields seem to have caused development delays . This requirement and 
PETROBRAS' right to be the sole operator in pre -salt oil reserves were removed in November 
2016, whereas efforts to reform t he local content regime in this area are under way . Biofuel 
production, an activity subject to cross -subsidization elements, continued to be assisted, inter alia , 
through: support to sugarcane production and fuel -flex cars; lending incentives to expand the  
industrial capacity for sugar and ethanol production; and, increased mandatory blending ratios for 
both gasoline and diesel. The state -owned ELETROBRAS continues to play a major role in the 
electricity sector. Since 2015, a tariff flag system allowing the  monthly pass -through of the extra 
costs of generating thermal energy to consumers has been applied. Electricity tariffs, set by the 
regulator ANEEL, continue to ensure cross -subsidization among different consumer categories. In 
addition, the tax burden on  end-user electricity tariffs remains significant and differs greatly across 
consumer groups.  
4.5.  Services, a key component of overall export competitiveness, remain the main contributor to 
Brazil's gross value added (73.3%, 2016)  and job creation, but contin ue to suffer from structural 
weaknesses hindering the growth potential of the entire economy. During the review period, 
Brazil's GATS commitments were improved with the ratification of the Fifth Protocol undertakings 
in the area of financial services. Thre e of Brazil's RTAs now contain WTO -plus services 
commitments and since 2015 preferential market access treatment has been granted to certain 
services and services suppliers of least developed countries. The government -owned banks' share 
of total bank asset s rose, and high interest spreads remain in place, inter alia , due to the lack of 
competitive pressure on major banks. Although non -independent the Central Bank continues to 
enjoy administrative autonomy; legislation allowing for more autonomy could possib ly be 
considered in the future.  A significant relaxation of reinsurance requirements on foreign insurance 
companies such as the obligation to make a cession to a local reinsurer and an intra -group cession 
cap was undertaken. Strong market competition conti nued to lead to further improvements in the 
quality and the tariffs of telecommunication services; during the review period local content 
requirements were used for auctioning radio spectrum frequencies. Certain audiovisual and 
broadcasting services remain  subject to foreign investment limitations and local content 
requirements or preferences.  
4.6.  Initiatives to address transport and related infrastructure bottlenecks were undertaken. The 
domestic aviation market remains highly concentrated and domestic public  air transport services 
(cabotage) reserved for Brazilian legal persons. The main commercial airports remain state owned 
and operated by a public enterprise. In maritime transport, the national flag fleet remains 
concentrated and dominated by vessels of th e state company PETROBRAS; cabotage remains 
reserved for Brazilian flag vessels, except under certain conditions. The main ports continue to be 
either operated by state or municipal governments or are administered by a public -owned firm, 
although the major ity of cargo movements is undertaken by private terminals; foreign vessels 
remain subject to a lighthouse fee. Foreign entry in wholesale trade is allowed except for solid, 
liquid and gaseous fuels and related products unless domestic requirements are met,  whereas 
commercial presence in retail services and franchising remains unrestricted. A 2014 digital 
marketing law set the framework for the use of the Internet; virtually all international e -purchases 
are charged with a 60% flat equalization tax. In addit ion to existing tax incentives, 
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  cope with the high demand from the mega events hosted during the review period. Regarding 
professional services, bilateral arr angements were signed in 2014 (architects and urban planners, 
Portugal), 2015 (engineers), and 2016 (architects and urban planners, France); a 2013 More 
Doctors Programme has allowed foreign doctors to work in Brazil without meeting the standard 
working re quirements. In 2015, healthcare services were opened to foreign investment.  
4.1  Agriculture, Forestry, and Fisheries  
4.1.1   Main features  
4.7.  Agriculture accounts for a relatively stable share of gross value added and employment that 
stood at 5.5% in 2016 (4.9% in 2012) and 13.4% in 2014, respectively (including fisheries and 
forestry, Table 1.1). According to Ministry of Agriculture, Livestock and Food Supply (MAPA) data, 
average annual total factor productivity (TFP) growth slowed down slightly from 4.08% in the 
period 2000-09 to 3.99% in the period 2000 -15.3 The fact that its employment share remains over 
three times its share in gross value added implies that labour productivity is a little more than a 
quarter of the level in the rest of the economy, thus reflecting in  part the dualistic nature of 
farming in Brazil, where capital -intensive and large -scale production co -exists with numerous small 
and relatively unproductive farms  producing for self -consumption or local markets.4 Brazil is 
endowed with the world's fourth -largest agricultural area, of which over a quarter is arable. 
Brazilian agriculture is crop and export oriented, accounting for 41.5% (35.6% in  2012) of total 
exports (see below) in 2016 (Chart 1.1). Almost half of exports are primary commodities used as 
inputs into further processing. The sector continues to provide substantial value added in 
agriculture -related activities; the entire agribusiness chain (including agricultural inputs, as well as 
processing and distribution activities) contributed 21.5% of GDP in 2015 (22% in  2011). 
Agriculture also remains an important contributor to the country's energy supply (Section  4.4.3.3) 
as, inter alia , sugar cane biomass provides over one third of the country's renewable energy 
output.  
4.8.  During the review period, th e agribusiness sector (including forestry products) maintained its 
crucial role in sustaining Brazil's trade surplus (Table 4.1). The s ector's trade surplus peaked 
in 2013 due to fast agri -exports growth driven by an extraordinar y grain production rise (13 % 
in 2013), and then fell progressively as a result of the decline of international commodity prices 
and the severe dry season affecting the soybean harvest (2015/16).  
Table 4.1 Brazil's agribusiness trade bal ance, 2010 -16  
(US$ million)  
 2010  2011  2012  2013  2014  2015  2016  
Agribusiness exports  76,442  94,968  95,814  99,968  96,748  88,224  84,935  
Agribusiness imports  13,399  17,508  16,409  17,061  16,614  13,073  13,628  
Agribusiness trade balance  63,043  77,460  79,405  82,907  80,134  75,151  71,307  
Total trade balance  18,491.0  27,625.0  17,419.6  388.6  -6,629.2  17,669.9  45,037.0  
Note:  The agribusiness numbers do not include imports of capital goods by agricultural companies.  
Source:  MAPA online information. Viewed at: http://www.agricultura.gov.br/internacional/indicadores -e-
estatisticas/balanca -comercial ; and Central Bank of Brazil.  
4.9.  Brazil re mains a major player in global agricultural trade, accounting for 5.1% (WTO 
definition) of total agricultural exports in 2015, a lower share than at the time of the previous 
Review (7.3%). It continued to be the world's third -largest exporter of agricultur al products, 
behind the EU and the United States.5 In 2015, Brazil maintained its position as the world's biggest 
                                                
3 Estimates by Gasques, J. G., Bacchi, M. R.,  Figueiredo, L., Bastos, E. T. and Valdes, C. from the 
Institute for Applied Economic Research (IPEA) and MAPA provided by the authorities.  
4 According to the authorities, over the past two decades the labour productivity gap between 
agriculture and other sectors of the economy has declined as the sector registered the fastest labour 
productivity growth across the whole economy with some of it occurring among small -scale farms producing 
high value product s. OECD (2015), Innovation, Agricultural Productivity  and Sustainability in Brazil, OECD Food 
and Agricultural Reviews , revised version of January 2016. Viewed at: 
http://dx.doi.org/10.1787/9789264237056 -en; OECD/FAO (2015), OECD -FAO Agricultural Out look 2015 -2014. 
Viewed at: http://www.fao.org/3/a -i4738e.pdf  and http://dx.doi.org/10.1787/agr_outlook -2015-en. 
5 WTO (2016), World Trade Statis tical Review 2016 , 21 July, Geneva.  Viewed at: 
https://www.wto.org/english/res_e/statis_e/wts2016_e/wts2016_e.pdf . WT/TPR/S/358 • Brazil  
 
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  supplier of sugar, orange juice, coffee, poultry meat and soybeans.6 Brazil's main agricultural 
exports decreased slightly over 2012 -15. Soybe an products remain the largest export, followed by 
meat products (especially poultry and beef), sugarcane, wood pulp and coffee (Chart 4.1). 
Together, these commodities accounted for 27.5% (22% in 2012) of total Brazilian exports 
in 2016 (Table A1.1).  
Chart 4.1 Main agricultural exports, 2012 -16 
0.02.55.07.510.012.515.017.520.022.525.0
Soybeans Meat Sugarcane Coffee Maize2012 2013 2014 2015 2016Chart 4.1  Main agricultural exports, 2012 -16
US$ billion
Source:  Information provided by the authorities.
 
Source:  Information provided by the authorities.  
4.10.   In 2016, the main destinations for Brazilian agri -food exports were China (24.9%), the EU 
(18.7%), the United State s (5.1%), Japan (3.1%), and Iran (3%).7 The importance of China as a 
trading partner for Brazilian agribusiness increased during the review period. In 2012, China 
purchased 19.3% of Brazilian agri -food exports, which represented some US$16.1  billion; this 
amount rose to U$17.8 billion in 2016.  
4.11.   Imports of agri -food products decreased slightly between 2012 and 2016, from 
US$11.6.  billion to US$11.2 billion. Wheat remains the single most important import commodity. 
Other major imports include: maize, malt, da iry products, palm oil, potatoes and garlic.8 Brazil 
also continues to depend on substantial imports of agricultural inputs, in particular fertilizers.  
4.1.2   Policy and institutional framework  
4.12.    During the review period, Brazil's basic agricultural policy and in stitutional framework 
remained unchanged. Its main policy objectives consist of expanding grain storage capacity, soil 
correction and recovery, and agricultural mechanization by fostering investments in these areas. 
In addition to its three main components , i.e. market price policy, rural credit, and crop insurance 
Subsidies (Section 4.2.4), which, inter alia , support commercial agriculture and small -scale family 
agriculture, other important policy measures, including agricultural land zoning and the promot ion 
of biofuels and organic production, contribute to the shaping of agricultural policy.9 Whereas the 
Agricultural and Livestock Plan for 2015/16 continued to provide for high levels of funding for 
credit subsidies, the 2016/17 Plan has promoted the devel opment of crop insurance by using funds 
previously dedicated to price guarantees (Section 4.2.4.1.4). Initiatives to restore domestic and 
international confidence in the safety of food (in particular animal) products included 
improvements in the inspection  system (Section 3.3.3).  
                                                
6 OECD/FAO (2015), OECD -FAO Agricultural Outlook 2015 , OEC D Publishing. Viewed at: 
http://www.fao.org/3/a -i4738e.pdf . 
7 MAPA online data. Viewed at: http://indicadores.agricultura.gov.br/agros tat/index.htm . 
8 MAPA online information. Viewed at: http://www.agricultura.gov.br/internacional/indicadores -e-
estatisticas/balanca -comercial . 
9 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
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  4.13.   The Agricultural and Livestock Plan continues to be administered by the Ministry of 
Agriculture, Livestock and Food Supply  (MAPA), whereas since 2016 the Family Agriculture Plan 
has been operated by the Special Secretariat for Fam ily Farming and Agrarian Development of the 
Office of the Chief of Staff (SEAD) (previously the Ministry of Agrarian Development (MDA)).10 The 
Secretariat of Agribusiness International Relations in the MAPA (SRI/MAPA) remains responsible 
for foreign trade i ssues and WTO notifications. A new Ministry of Social and Agrarian Development 
(MDSA) supports the most vulnerable family farmers and promotes food and nutrition security 
through important programmes, such as the Food Purchase Programme (PAA) and the Produ ctive 
Asset Oriented Cash Transfers Scheme, aimed especially at families in extreme poverty living in 
rural areas. MDSA and SEAD work together in the implementation of some programmes, such as 
the PAA, which is financed with resources from both agencies. T he SEAD 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 state company linked to the MAPA, is 
responsible for administering a number of a gricultural policy measures, including those related to 
strategic storage and minimum price guarantees (Section 3.3.5).   
4.1.3   Border measures  
4.14.   Since 2012, the average MFN tariff for agricultural products has remained virtually 
unchanged. In 2017, it stands at 10 .2% (WTO definition) (10.3% HS definition), the same as in 
2012 (Tables 3.1 and A3.1). The 55% peak rate of the entire Customs Tariff affects solely 
desiccated coconuts. Tariffs higher than the average MFN applied tariff for agricultural products 
continue to apply to: dairy products (18.6%), beverages, spirits, and tobacco (16.6%), sugar and 
confectionary (16.7%), coffee and tea (14.5%), and cereals and preparations (11.5%), while 
imports of cotton (6.3%), oil seeds, fats and oils and their products (7.9%),  and animals and 
animal products (7.9%), are subject to tariffs lower than the average (Table 3.3).  
4.15.   According to Brazil's recent notifications, the tariff rate quota for apples and pears, under its 
multilateral agricultural market -access commitments, was not implemented in 2011, 2012, 2013 
or 2014, given that the applied MFN tariff (10%) was below the in -quota rate (13.5%) for both 
products (Section 3.1.3.1).11 Although in April 1996 Brazil notified its intention to eliminate the 
tariff rate quota for wheat  to the WTO, no action has been taken so far and there are no plans for 
action in this area; upon request of the United States and Canada, Brazil held two consultations on 
this issue under GATT Article XXVIII in 2016, and further consultations were to be h eld in 2017.  
4.16.   Imports of agricultural products may also benefit from tariff rate quotas applied individually 
by Brazil, in accordance with MERCOSUR's rules on temporary measures regarding supply 
shortages (Section 3.1.3.1). In addition to chemicals and oth er industrial inputs, as of 
19 January  2017, in -quota tariffs at a reduced rate of 2% were in place for edible fruit and nuts 
not shelled (7,500 tonnes, 6/10/15 -5/4/17), hop cones (1,800 tonnes, 23/1/17 -22/1/18), and 
palm kernel (224,785 tonnes, 6/5/16 -5/5/17).12 At the time of the previous review, imports of 
cotton and jute were subject to a reduced in -quota tariff rate of zero and palm kernel to an 
in-quota tariff rate of 2%. Mexican exports of garlic to Brazil also benefited from a zero in -quota 
tariff in  2011 under Economic Complementation Agreement No. 53 between the two countries.  
4.17.   Since 1996, Brazil's soybeans and maize exports have been exempt from the interstate tax 
on the circulation of goods and services (ICMS) (Section  3.1.4).13 However, in Februar y 2016, the 
State of Goias, the fifth -largest grain producing state in Brazil, removed this exemption by 
authorizing the imposition of the ICMS on soybeans and maize leaving the state. All exports from 
Brazil are exempt from the ICMS.  
                                                
10 Under the last ministerial reform, the former Ministry of Agrarian Development (MDA) was transferred 
to the Office of the Chief of Staff (Casa Civil) and became the Special Secret ariat for Family Farming and 
Agrarian Development of the Office of the Chief of Staff (SEAD). All the program mes previously managed by 
MDA are now managed by SEAD.  
11 WTO notifications G/AG/N/BRA/35, 26 January 2015, and G/AG/N/BRA/38, 8 January 2016.  
12 CAMEX Resolution No. 01, 19 January 2017.  
13 The ICMS affects products that are produced in one state, but utilized in another state. Each state in 
Brazil is allowed to determine the amount of ICMS tax, which generally is in the range of about 9% to 12% 
(Section 3.1.4). OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org /agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
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  4.18.   As from March 2015, b ilateral discussions have been held to expand exports of, inter alia , 
beef, poultry, dairy, fruit, and wheat to the Russian Federation, Myanmar, Japan, South Africa and 
Argentina which are either eliminating previous non -tariff restrictions on these produc ts or 
recommencing their importation.14 For example, Brazil updated a sanitary and phytosanitary (SPS) 
agreement with the Russian Federation to export wheat in July 2015. In 2016, Brazil and the 
United States concluded negotiations for the reciprocal openin g of their markets for fresh and 
frozen bovine meat. By January 2017, Brazil and South Africa were at an advanced stage of 
negotiations for an agreement for promoting the sales of unprocessed pig meat. At the same time 
new rules to facilitate exports of or ange juice to China were being negotiated. Furthermore, at the 
beginning of  2016, the negotiation of a new international sanitary certificate for poultry meat with 
the Republic of Korea was concluded. During the same period, Brazil and Argentina discussed a 
strategy to open livestock product markets and speed up negotiations for agreements with the 
European  Union, China and the Russian Federation.  
4.19.   According to Brazil's recent WTO notifications and information, similar to past practice, no 
export subsidies were granted for agricultural produce in the period 2013 -2016.15 On the other 
hand, Brazil's food aid abroad increased considerably from 47,284 tonnes in the period 2008 -10 to 
230,816 tonnes in the period 2012 -14, of which 83.3% was rice.16 In 2015, Brazil's  food aid 
decreased to 16,480 tonnes, of which 65.6% was rice, and in 2016 it dropped drastically to 
1,982  tonnes all of which was rice. Following an investigation on irregular practices involving 
certification of meat and meat products at 21 processing fa cilities handling beef, poultry and pork 
products, on 22 March 2017 Brazil reaffirmed the adequate maintenance of the official sanitary 
programmes and specific controls on domestic products of animal origin, and stated that it 
expected Members not to resor t to measures that would constitute arbitrary restrictions on 
international trade or run counter to the disciplines of the SPS  Agreement and other WTO rules.17  
4.1.4   Domestic support  
4.20.   During the review period, Brazil continued to provide a broad range of assistan ce to its 
agricultural sector, inter alia , in the form of administered interest rate or concessional credit lines, 
price support mechanisms, and insurance premium subsidies (Section 4.2.4.4). No new support 
programmes, other than the 2013 investment progra mmes the Warehouse Construction and 
Expansion Programme (PCA) and the Programme to Encourage Innovation in Agricultural 
Production (INOVAGRO), were introduced during the review period.18  
4.21.   Domestic support to agricultural producers remains at a low level com pared with OECD 
countries.19 According to the OECD, Brazil's total support estimate (TSE) to agriculture averaged 
0.35% of GDP in 2012 -15 (0.55% in 2008 -10), well below the OECD average of 0.7% (Table 4.2). 
Support to farmers as measured by the producer sup port equivalent (PSE) was 3.2% of gross farm 
receipts in the period, below the OECD average of 17.6%.20 Support peaked in 2014 and fell in 
2015 as both market price support (MPS) and payments based on input use (credit and insurance 
subsidies) declined. The  MPS reduction was due to the minimum guaranteed prices increasing at a 
slower pace than inflation, and the depreciation of the R$ relative to the US$. According to the 
OECD, while weak infrastructure is still a significant bottleneck for agricultural deve lopment, 
financing of general services (GSSE) to agriculture constituted less than 20% of total support to 
                                                
14 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. 
15 WTO notifications G/AG/N/BRA/36, 27 January 2015, and G/AG/N/BRA/39, 12 January 2 016. 
16 WTO documents G/AG/N/BRA/33, 3 February 2014; G/AG/N/BRA/36, 27 January 2015; 
G/AG/N/BRA/39, 12 January 2016; and, G/AG/N/BRA/42, 28 October 2016.  
17 WTO document G/SPS/GEN/1545, 22 March 2017.  
18 Central Bank Resolution BACEN No. 4227 of 18 June 2013 . 
19 The OECD has been publishing reviews of agricultural policies in OECD countries and some other 
economies , including Brazil,  for several years. In these publications, the value of transfers to agricultural 
producers is measured using the producer suppor t estimate (PSE) and associated indicators. The methodology 
for calculating these indicators is different from that used to calculate the aggregate measure of support 
(AMS), and the two sets of data are neither compatible nor comparable.  
20 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agric ultural -policy -monitoring -and-evaluation -
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  the agricultural sector in 2013 -15 and over time this share tended to decline considerably.21 
However, 93% of PSE is given through support based on co mmodity output or on input use, 
particularly through credit subsidies, debt rescheduling, and rural insurance; MPS was relatively 
low in 2015 (Table 4.3, Section 4.2.4.1.2). According to the OECD, an important part of support to 
producers continues to be p rovided through measures that distort farm prices and current costs 
(e.g. MPS, concessional credit, and crop insurance subsidies) although the aggregate level of that 
type of support is moderate and varies across commodities.  
Table 4.2 Agricultural support, by commodity, 2012 -15  
  2012  2013  2014  2015  
Total support estimate (TSE), US$ million  8,542.0  7,609.6  8,705.0  5,181.2  
Percentage of TSE to GDP (%)  0.4 0.3 0.4 0.3 
Total PSE (US$ million)  6,873.0  6,193.2  7,280.4  4,092.1  
Support based on commodity output – payments based on 
output  336.3  468.3  725.6  327.9  
Support based on commodity output – MPS 2,838.3  1,246.4  844.9  330.1  
Direct payment  3,698.4  4,478.6  5,709.9  3,434.1  
Percentage PSE to gross farm receipt s (%)  3.5 3.0 3.7 2.6 
General services support estimate (GSSE), US$ million  1,575.9  1,416.3  1,424.6  1,089.1  
Consumer support estimate (CSE), US$ million  -2,924.4  -1,913.1  -1,077.9  -422.7  
Total producer SCT (US$ million)  1,007.6  1,085.7  721.5  588.8  
Share of producer SCT in total PSE (%)  14.7 17.5 9.9 14.4 
Percentage SCT (%)      
Refined sugar  .. .. 0.3 0.8 
Milk 0.005  0.001  0.001  .. 
.. Not available.  
Source:  OECD Agriculture Statistics. Viewed at: http://stats.oecd.org/index.aspx?r=431860# .  
Table 4.3 Direct payment and general services support, 2012 -15 
(US$ million, unless otherwise indicated)  
 2012  2013  2014  2015  
Direct payment  3,698.4  4,478.6  5,709.9  3,434,1  
Share of direct payment to PSE (%)  53.8 72.3 78.4 83.9 
Based on input use  3,377.3  4,024.3  5,320.6  3,136.5  
Based on current area planted/animal numbers/receipt/income, 
production required  321.1  454.3  389.3  297.6  
General services support estimate (GSSE)  1,575.9  1,416.3  1,424.6  1,089.1  
Agricultural knowledge and innovation system  262.5  214.9  178.2  136.2  
Inspection and control  109.8  124.6  73.0 55.8 
Development and maintenance of infrastructure  748.0  736.5  772.8  590.8  
Marketing and promot ion 238.0  23.3 29.1 22.2 
Cost of public stockholding  217.6  317.0  371.6  284.0  
Share of GSSE to TSE (%)  18.4 18.6 16.4 21.0 
..  Not available.  
Source:  OECD Agriculture Statistics. Viewed at: http://stats.oecd.org/index.aspx?r=431860# .  
4.22.   According to Brazil's WTO notifications on domestic support measures during the review 
period, the current total aggregate measure of support (AMS) stood at US$213.7 million in 
2010/11 (wheat, sisal) and US$7.7 mill ion 2011/12 (sisal) (above its de minimis  level but much 
below its final bound level of U$912.1 million), and then fell to zero (i.e. below its de minimis  
level) in 2011/12 and remained at this level in 2013/14 and 2014/15.22 As of 2013/14, coffee, 
edible b eans, maize and wheat remained the only items subject to MPS either through public 
option contracts or minimum support prices; in addition, product -specific support was granted for 
cocoa, grapes, and sugarcane. Total domestic agricultural support notified by Brazil (including 
green box, special and differential treatment, and de minimis  support not subject to reduction 
                                                
21 The main part of the Brazilian GSSE is represented by agrarian reform spending, which includes 
government purchase of lands for resettlement and investment in infrastructure and basic commun al services 
for those settled areas. OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. 
22 WTO documents: G/AG/N/BRA/32, 3 February 2014; G/AG/N/BRA/37 29 January 2015; 
G/AG/N/BRA/40, 12 January 2016; and, G/AG/N/BRA/41, 27 Octo ber 2016.  WT/TPR/S/358 • Brazil  
 
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  commitments) dropped from US$9.9  billion in 2010/11 (US$3.6  billion excluding green box and 
S&D assistance) to US$8.8  billion in 2013/14 (US $2.7 billion excluding green box and S&D 
assistance) and US$4.8 billion in 2014/15 (US$1.9 billion excluding green box and S&D assistance) 
(Table  A4.1). In 2014/15, de minimis  support included: MPS (edible beans and maize); other 
product -specific assistanc e (e.g. Agricultural Products' Sale Option Private Premium (PEPRO)) 
(cotton, oranges, and maize) and product -specific credit (coffee, cocoa, and sugarcane); and 
non-product -specific support of US$1.7 billion (mainly production and marketing credit, debt 
rescheduling programmes, and insurance programmes). In 2013/14, green box support had 
increased to more than one and a half times the size of Brazil's total product - and 
non-product -specific AMS, compared to 1.25 times in 2010/11, and in 2014/15 fell to abou t 86% 
of this amount (Table A4.1).  
4.1.4.1   Agricultural/rural credit23 
4.23.   Agricultural or rural credit at administered and preferential interest rates remains the major 
policy instrument for the sector; it is provided to both commercial and small -scale family farms 
(Table 4.4).24 This measure is aimed at offsetting the country's high market interest rates (see 
below) and to promote access to credit for farmers who would not obtain it otherwise in the 
domestic financial system. At the same time, as it is used for financi ng a major share of food 
production for domestic consumption, it is considered an important food security tool. Since  1965, 
the National Rural Credit System (SNCR), which is under the control of the Central Bank of Brazil, 
has directed credit to farmers at  administered and preferential interest rates. For commercial 
agriculture, the SNCR system provides credit for marketing, working capital, and investment. The 
National Monetary Council (CMN) is in charge of issuing regulations for agricultural credit schem es, 
which are spelled out in the Central Bank's Rural Credit Manual  (see below). These regulations 
must be followed by all institutions participating in the SNCR, which includes public banks, 
cooperatives, and private commercial banks. As of January 2017, 589 (468 in 2012) financial 
institutions participated in the SNCR, of which 49 (28 in 2012) were private banks. In 2016, public 
banks provided 58% (57.5% in 2012) of total rural credit, followed by private banks 30% (32.5% 
in 2012), and cooperatives 12% (1 0% in 2012).  
Table 4.4 Federal Government agricultural support programmes, 2013 -16 (prevailing 
norms for crop -year 2016/17)  
Products/projects  Beneficiaries  Credit limit  Annual interest 
rate Duration  Disbursem ent 
(R$ million)  
Medium -Scale Agricultural Producer Support Programme (PRONAMP)  
Investment in goods 
and services aimed at 
increasing productivity 
and income.  
Financeable items: 
financing and 
investment. In case of 
financing, it is also 
allowed to include  
funds to small 
expenses considered 
as investments (repair 
and conservation of 
production assets, 
installation, acquisition 
of service animals, 
deforestation)  Gross annual 
income up to 
R$1.76  million, 
at least 80% 
from 
agricultural 
activities  Financing: 
R$1.5 million; 
investment: 
R$430,000  Financing (working 
capital and 
investment): 8.5%; 
commercialization: 
9.5%  Financing: 
up to 
2 years; 
investment: 
up to 
8 years 
(3-year 
grace 
period)  2013: 13,496.3  
2014: 19,044.2  
2015: 16,843.6  
2016: 19,293.9  
Agricultural  Cooperatives Capitalization Programme (PROCAP -Agro)  
Acquisition of capital 
shares (paid -in shares 
– parts and working 
capital)  Cooperatives  Pay-in: R$55  million; 
working capital: 
R$65 million  Pay-in: 8.5% (paid 
in shares); working 
capital TJLP  6 years 
(2-year 
grace 
period); 
working 
capital: 
2 years 
(6-month 
grace 
period)  2013: 2,170.1  
2014: 1,755.5  
2015: 2,083.4  
2016: 1,977.9  
 
                                                
23 More information on this measure is available in WTO document WT/TPR/S/283/Rev.1, 26 July 2013.  
24 WTO document WT/TPR/S/283/Rev.1, 26 July 2013; OECD (2016), Agricultural Policy Monitoring and 
Evaluation 2016 , 16 June. Viewed at: http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -
monitoring -and-evaluation -2016_agr_pol -2016-en. WT/TPR/S/358 • Brazil  
 
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  Products/projects  Beneficiaries  Credit limit  Annual interest 
rate Duration  Disbursem ent 
(R$ million)  
Low Carbon Agriculture Programme (ABC Programme)  
Projects to reduce 
greenhouse gas 
emissions (e.g. 
recovery of pastures, 
recove ry of degraded 
areas, organic crops, 
directing planting, 
integration of crops, 
cattle production, 
forest, forest 
plantation, 
environmental 
recuperation, waste 
treatment, Dendê 
plantation, and 
biological nitrogen 
fixation)  Farmers and 
cooperatives  R$2.2 mil lion; up to 
R$5 million for planted 
forests  8.5%; producer 
placed within 
PRONAMP 
framework: 8%  Up to 
15 years  2013: 608.0  
2014: 333.3  
2015: 413.8  
2016: 681.0  
Programme for the Modernization of Agriculture and the Conservation of Natural Resources (MODERAG RO) 
Projects related to 
sanitary and/or 
environmental 
adaption needs limited 
to 35% of the amount 
of the investment in 
the following 
activities/crops: 
apiculture, 
aquaculture, poultry, 
chinchilla production, 
rabbit breeding, 
floriculture, fruit, palm 
trees, olive growing, 
production nuts, 
horticulture, sheep and 
goat farming, milk, 
fishing, frog culture, 
sericulture and pig 
farming.  
Combat brucellosis and 
tuberculosis  Farmers and 
cooperatives  Farmers: R$880,00 
(individual farmer) 
and 2.64  million 
(collecti vely taken); 
R$220,000 no 
PNCEBTa limited to 
R$5,000 per animal  9.5%  Up to 
10 years 
(3-year 
grace 
period)  2013: 259.3  
2014: 357.3  
2015: 626.2  
2015: 472.6  
Incentives Programme for Irrigation and Storage (MODERINFRA)  
Irrigation and storage 
projects  Farmers  and 
cooperatives  Farmers: 
R$2.2  million; 
cooperative: 
R$6.6  million  8.5%  Up to 
12 years 
(3-year 
grace 
period)  2013: 259.3  
2014: 357.3  
2015: 626.2  
2016: 472.6  
Cooperative Development Programme for the Enhancement of Agricultural Value Added (PRODECOOP)  
Projects to improve 
production systems 
and marketing 
(installation of 
industries regardless of 
sector – improvement 
or processing). It may 
be financed: studies, 
projects and 
technology, civil 
engineering, 
installations, national 
equipment, pre -
operational e xpenses, 
landed costs, working 
capital related to the 
investment project, 
pay in of shares 
related to the project  Cooperatives  Up to R$110  million 
(up to 90% of the 
project value); 
R$150  million for 
projects in other 
federal states or to 
the centra l 
cooper ative; 
R$200  million to the 
central cooperative to 
finance 
industrialization 
projects to produce 
products ready for 
consumption  9.5%; TJLP+4.5% 
for acquisition 
assets  Up to 
12 years 
(3-year 
grace 
period)  2013: 905.7  
2014: 814.3  
2015: 1,816.1  
2016: 797.1  
Tractor Fleet Modernization Incentives Programme (MODERFROTA)  
Agricultural 
mechanization 
(purchase of tractors, 
implements, 
harvesters, sprayers, 
self-propelled, and 
equipment for 
preparation, drying, 
and processing of 
coffee)  Farmers and 
cooperatives  Up to 90%; up to 
100% for 
medium -scale 
producers  8.5%; gross 
income up to 
R$90 million or 
10.5% (others)  Up to 
8 years 
(new) or 
4 years 
(used)  2013: 36.7  
2014: 181.8  
2015: 4,435.4  
2016: 7,103.2  WT/TPR/S/358 • Brazil  
 
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  Products/projects  Beneficiaries  Credit limit  Annual interest 
rate Duration  Disbursem ent 
(R$ million)  
Warehouse Construction and Expansion Programme (PCA)  
Expansion a nd 
construction of new 
warehouses  Farmers and 
cooperatives  Up to 100%  8.5%  Up to 
15 years 
(3-year 
grace 
period)  2013: 450.0  
2014: 3,373.2  
2015: 1,764.5  
2016: 810.5  
Programme for the Sustainability of Investment (PSI) [Eliminated in 2015]  
Purchase of capi tal 
goods, e.g. vehicles, 
machinery, equipment, 
and warehouses  Farmers and 
cooperatives  Up to 70%  7%; 9.5 %  Up to 
8 years 
(24-month 
grace 
period)  2013: 9,737.0  
2014: 9,666.9  
2015: 1,803.1  
2016: 29.4  
Programme to Encourage Innovation in Agricultural Produc tion (INOVAGRO)  
Technical innovation 
(e.g. incorporation of 
new technologies to 
rural areas, 
automation and 
adaptation of poultry 
industry, pig breeding, 
dairy cattle farming, 
protected cultivation, 
computerization, 
training, precision 
farming)  Farmers an d 
cooperatives  R$1.1  million 
(individual farmer); 
R$3.3  million 
(collectively taken)  8.5%  Up to 
10 years 
(3-year 
grace 
period)  2013: 13.3  
2014: 1,054.2  
2015: 1,349.7  
2016: 738.1  
 
Programme to Strengthen Household Agriculture (PRONAF)  
Provides credit to 
small -scale producers 
with annual income of 
R$ 20.000  per family; 
to families within the 
land reform 
framework; to small -
scale fishermen; to 
aquaculture farmers; 
to forestr y; to 
indigenous; to small - 
scale extractivists; to 
quilombola  
communities.  Small -scale 
producers  Up to R$360.000 to 
pig breeding, poultry 
farming and fruit 
farming  2.5% for 
operations up to 
R$10.000; 4.5% 
for operations from 
R$10.000 to 
R$30.000 and 
5.5% for 
operations above 
R$30.000  Up to 3 
years to 
palm and 
saffron; up 
to 2 years to 
biannual 
crops. Up to 
1 year to 
other crops  2013: 19,990.3  
2014: 24,705.2  
2015: 21,769.0  
2016: 22,596.0  
Federal Fund for the Defence of the Coffee Economy (FUNCAFÉ)  
Provides credit to 
marketing, 
researching, stocking, 
plantation and other 
expenses to coff ee 
farmers and traders  Producers, 
cooperatives, 
roster and 
instant coffee 
producers, 
coffee 
benefactor and 
exporters  For farmers: 
R$1.2  million (working 
capital) or 
R$2.4 million 
(commercialization); 
for industries: 
R$40 million 
(commercialization)  9.5% (f armers) or 
11.25% 
(industries)  1 year  2013: 2,087.9  
2014: 2,721.3  
2015: 2,549.8  
2016: 2,963.8  
Programme to Support the Renewal and the Implementation of New Cane Fields (Prorenova Rural)  
Increase cane 
production by financing 
the renewal and the 
implement ation of new 
cane fields  Farmers and 
cooperatives  Up to R$300,000,000  TJLP rate plus 2.1% 
remuneration rate 
for BNDES plus a 
rate negotiated 
between the 
beneficiary and the 
accredited financial 
institution  Up to 
72 months 
(18-month 
grace 
period)  2013: 301. 7 
2014: 547.3  
2015: 104.3  
2016: 50.5  
Others  
Without programme 
(Sem Programa )b  .. .. .. .. 2013: 85,253.8  
2014: 96,395.3  
2015: 96,156.8  
2016: 103,268.2  
Total  2013: 137,719.9 
2014: 164,342.3  
2015: 153,940.9  
2016: 162,449.2  
.. Not available.  
a National P rogramme to Control and Eradicate Brucellosis and Tuberculosis.  
b Viewed at: http://www.bcb.gov.br/pt -br/#!/c/MICRRURAL . 
Source:  MAPA (2015), Plano Agrícola e Pecuário 2015 -2016 Brasilia; online da ta by Banco Central Do Brasil, 
Departamento de Regulação, Supervisão e Controle das Operações do Crédito Rural e do Proagro 
(2016). Viewed at: http://www.bcb.gov.br/pt -br/#!/c/MICRRURAL/ ; Ban co Central Do Brasil (2016), 
Manual do Crédito Rural . Viewed at: http://www3.bcb.gov.br/mcr ; and BNDES online information. 
Viewed at: http://www.bndes.gov.br/wps/portal/site/home/financiamento/produto/prorenova -rural. WT/TPR/S/358 • Brazil  
 
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  4.24.   Since Brazil's last TPR, the various sources of funding of administered interest rate and 
concessional credit remain virtually unchanged (Table 4.5). Th ey consist of mandatory/compulsory 
resources, rural savings, Agribusiness Credit Bills (LCAs), constitutional funds, credit lines 
managed by the National Bank for Economic and Social Development (BNDES), free resources, the 
Brazilian Coffee Fund (FUNCAFE),  the Worker's Support Fund (FAT), as well as other funds and 
sources. Between 2010 and 2015, the share of credit financed with mandatory resources continued 
to decline, while sources such as rural savings, free resources, and BNDES programmes rose in 
impor tance (Table 4.5). In 2016, the LCAs became the third most important source of credit, after 
rural savings and mandatory resources whose importance alternated.  
Table 4.5 Sources of agricultural/rural credit, 2 010-16 
(%) 
 Mandatory 
resources  Rural 
Savings  LCA Constitutional 
Funds  BNDES  Free 
resources  FUNCAFE  FAT Other 
resources  
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 1.7 
2012  34.0 31.8  8.5 9.9 4.4 1.6 1.3 8.5 
2013  39.6 30.3  7.4 11.3 5.2 1.5 0.2 4.4 
2014  38.3 34.7  6.5 10.5 7.3 1.6 0.2 1.0 
2015  38.7 30.2 3.4 7.0 10.8 6.1 1.6 0.3 2.1 
2016 29.7 32.3 11.2 7.1 10.5 4.5 1.8 0.1 2.8 
Source:  MAPA, based on Central Bank of Brazil online information. Viewed at: 
http://www.bcb.gov.br/?RELRURAL  and http://www.bcb.gov.br/pt -br/#!/c/micrrural/ . 
4.25.   Funding from mandatory/compulsory resources, where public and private banks 
participating in the SNCR are obliged to either hold their sight deposits as obligatory reserves at 
the Central Bank at zero interest rates or to allocate the same proportion in loans to agricultural 
activities at below market interest rates  remains in pla ce. As of June 2012, 34% of these sight 
deposits, a ratio set at the discretion of the CMN, should be used for agricultural credit at a 
preferential interest rate, at no cost for the National Treasury.  
4.26.   Rural savings ( Poupança Rural ) schemes maintained by p ublic banks ( Banco do Brasil, 
Banco da Amazônia, Banco do Nordeste ) and cooperative banks are obliged to hold 74% (as from 
June 2015, previously 67% (June 2013 -May 2015) and 68% (June 2011 -May 2013)) of their sight 
saving deposits for agricultural credit a t market or preferential interest rates  for as long as the 
National Treasury decides to equalize the difference between these rates (see below).  
4.27.   Agribusiness Credit Bonds ( Letras de Crédito do Agronegócio,  LCAs), which are fixed income 
securities backed by  credit transactions linked to agribusiness, remained in place. They differ from 
traditional fixed income instruments because they are exempt from Income Tax (IR) for 
individuals. Since June 2015, part of the funds raised by this financial instrument must be 
allocated to agricultural credit at no cost for the National Treasury. Between June 2015 and 
May 2016, the mandatory ratio stood at 50% of LCAs backed by certain types of credit 
transactions; as of June 2016, it was reduced to 35% of which 4 0% at a fixe d rate of up 
to 12.75% per year and 60% at market rates .  
4.28.   The Constitutional Funds are aimed at reducing regional inequalities through the financing of 
production activities including agriculture. They consist of three regional funds: the FNO 
(North  Region ), the FNE (North -East), and the FCO (Centre -West) that similarly to rural savings 
schemes are administered by Banco da Amazônia, Banco do Nordeste, and Banco do Brasil , 
respectively; they are capitalized with federal resources deriving from the Tax on Ind ustrial 
Products (IPI) and the Income Tax (IR).  
4.29.   Some investment credit allocations under the SNCR, such as Programme ABC, Moderagro, 
Moderinfra, Moderfrota, PSI, PRODECOOP, PRONAMP, PROCAP -Agro, INOVAGRO and PCA, are 
funded by BNDES and managed by MAPA (T able 4.4). As of 2014, BNDES also funded investment 
under the Programme of Support to the Sugar and Ethanol Sector (PASS), an ethanol stock 
programme also managed by MAPA, and PAISS Agricola, a programme for the development of 
agricultural research.25  
                                                
25 USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barriers . Viewed at: 
https://ustr.gov/about -us/policy -offices/press -office/repo rts-and-publications/2016/2016 -national -trade -
estimate . WT/TPR/S/358 • Brazil  
 
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  4.30.   Rural credit lines operated by banks with capital deriving from mandatory and free 
resources remain subject to the rules contained in the Rural Credit Manual  (last updated in 
September 2016).26 Since 2013, the main changes to the Manual have involved, inter ali a, a 
revision of the financing terms, mainly on interest rates and limits of financing, as well as the 
creation of new investment programmes (INOVAGRO and PCA). Under the equalization principle, 
resources from the National Treasury are used to cover the di fference between market rates and 
those applied to certain rural credit operations; the equalization principle applies only to resources 
from federal official banks ( Banco do Brasil, Banco do Nordeste, Banco da Amazônia  and BNDES) 
and cooperative banks. Th e available amount of credit resources subject to equalization for 
agriculture is set for the annual crop period, from July to June; the annual credit equalization 
expenditures by the National Treasury were R$1,360.9 million (2013), R$791.8 million (2014),  
R$8,395.5 million (2015), and R$4,254.2 million (up to April 2016). To access credit resources  for 
working capital of up to R$300,000, beneficiaries must join PROAGRO but can choose rural 
insurance, to avoid debt renegotiation and prevent losses to public  and private banks. According to 
the general rules for rural credit programmes, beneficiaries must reside in Brazil, but they are not 
required to be Brazilian nationals. In the case of rural credit lines operated by majority 
government -owned financial inst itutions, financing may not be granted to companies 
headquartered abroad or companies whose voting capital is majority -owned by foreigners.  
4.31.   Agricultural credit resources available to commercial farmers under the Agricultural and 
Livestock Plans increased until 2016. Between 2014/15 and 2015/16, they rose by 20% to 
R$188  billion (US$56 billion), and in 2016/17 they decreased by 2% to R$183.8 billion; of these 
resources only 20% (2015/16) and 18.1% (2016/17) were used for investment loans, and the 
remaining were directed to working capital and marketing loans.27 MAPA's agricultural plan does 
not specify the actual amount of administered interest rate, or concessional and commercial loans, 
except for the crop year 2015/16; according to the authorities, the allo cation (availability) of credit 
resources for investment by commercial farmers decreased by 13.3% in 2015/16 and 11% 
in 2016/17 to reflect developments in demand, but strongly increased for working capital and 
marketing loans, following the increase in com pulsory resources from LCAs. Concessional rural 
credit disbursement for commercial farmers stood at R$119.7 billion (2014/15), R$120.5 billion 
(2015/16) and R$63.6 billion (2016/17 up to December 2016). Total r ural credit disbursements 
rose from R$139.7 bi llion in 2013 to R$164.6 billion in 2014, and consequently dropped to 
R$154.2  billion in 2015 and rose to R$ 162.5 billion in 2016 (up to December) .28  
4.32.   The high level of rural debt remains a major challenge which is being addressed. During the 
review period , the renegotiation of rural financing was governed by about 20 regulations, including 
Central Bank Resolutions in accordance with ordinary laws and National Monetary Council 
decisions. To address the far -reaching economic and social effects of the worst d rought of the last 
100 years in the Northeast region, in 2016 a law dealing with the renegotiation of farmers' debt 
was passed.29 The National Treasury expenditures on interest equalization related to the 
renegotiation of rural debt (Law No. 9,866 of 1999) were R$ 300.3 million (2013), 
R$71.4  million  (2014), R$61.9 million (2015), and R$33.0 million (2016).  
4.33.   According to the OECD, whereas the agricultural credit system is intended to address 
failures in financial markets, it also creates risks (default) for government and producers, 
particularly since the macroeconomic situation has deteriorated (Section 1.2.1).30 The higher 
availability of funds for loans is potentially creating excess supply. Most of this credit is 
concentrated on subsidizing short -term borr owing such as working capital and commercialization 
loans that further distort markets. A reform of the concessional credit system could consider a 
gradual downsizing of concessional loans for working capital to commercial producers, simplifying 
regulation s and procedures, and re -focusing to support on -farm investments that explicitly 
                                                
26 BCB online information, "Rural Credit Manual". Viewed at: http://www3.bcb.gov.br/mcr/completo . 
27 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en; MAPA online information, "Plano Agricultura e Pecuário 2016/2017". Viewed at: 
http://www.agricultura.gov.br/pap . 
28 Banco Central do Brasil  online data. Viewed at: http://www.bcb.gov.br/pt -br/#!/c/MICRRURAL/ . 
29 Law No. 13.340, 28 September 2016.  
30 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. WT/TPR/S/358 • Brazil  
 
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  incorporate technological innovations and advanced farm management and environmental 
practices.  
4.1.4.1.1   Minimum price guarantees  
4.34.   During the review period, Brazil maintained unchange d its 1966 policy of guaranteed 
minimum prices (PGPM), an important pillar of its agricultural policy. The basic element of this 
policy remains the regionally -set minimum guaranteed prices which cover a broad range of crops 
from rice, wheat, maize, cotton,  and soybeans, to regional crops like cassava, beans, açaí, 
guaraná, and sisal, as well as a few livestock products like cow and goat milk and honey 
(Table  4.6).31 On the basis of these minimum guaranteed prices, the government implements 
several price supp ort mechanisms (Table  4.6), including direct government purchases (AGF); 
premiums to commercial buyers who pay minimum prices to supply producers (PEP, VEP); and 
public and private options contracts backed by private risk premium option s (COV, PROP, PEPRO) . 
In addition to these programmes, producers receive various reduced -interest marketing loans 
which enable them to withhold the sale of a product in anticipation of a higher market price (FPPG, 
FEPM  and FEE below). The state -owned CONAB (Section 4.2.2) ope rates both the AGF set by the 
MAPA Secretary of Agricultural Policy (SPA) for commercial and small -scale farms, and the 
equivalent programme set by the SEAD for small -scale agriculture (PAA, Section 4.2.4.3) as well 
as the minimum prices programme for fami ly farms (PGPAF programme). The PAA, financed by 
MDSA and SEAD and managed by MDSA and CONAB, makes direct acquisitions from family farms 
at market prices. The products acquired from family farmers either go into stocks or are 
distributed as part of a food  programme or donated to vulnerable people. Guaranteed prices for 
small -scale farmers are based on the average regional production cost of family farms.  
Table 4.6 Price support programmes, 2014/2015 and 2015/ 16 
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. Portaria No.  854 of 20 August 2014 fixes 
minimum prices for a number of products for the 2014/15 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).  Products benefited by PGPM in the 
2014/15 were cotton, corn, orange and 
edible beans.  
The only product benefited by PGPM in 
2016 was wheat.  
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 un der the AGF must be 
stored in warehouses accredited by the CONAB.  In 2014/15 crop year, the AGF was used 
to purchase only edible beans 
(75,942  tonnes) and corn (20,158 
tonnes). In 2016, the AGF was not used 
to purchase any products.  
Premium for Product O utflow (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 addit ion to 
guaranteeing 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.  The programme did not support any 
products in 2014/15 crop year. The 
programme supported only wheat in 
2016 (47,791 ton nes, R$8.8  million).  
                                                
31 OECD (2016), Agricultural Policy Monitori ng and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en; USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barriers . Viewed 
at: https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -national -trade -
estimate . WT/TPR/S/358 • Brazil  
 
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  Price support programme/description  Use/cost  
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 2014/15, the VEP was used only for 
corn: 17,075 tonnes of corn were sold 
through auctions for a value of R$5.6 
million. In  2016, the VEP was not used.  
Public Option Contracts (COV)   
The Government offers option contracts to producers and 
cooperatives through public auctions. Winning bidders 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. The scheme may be used for 
any product covered by the PGPM.  The programme did not support any 
products in 2014/15 crop year. The 
programme did not support any product 
in 2016.  
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 G overnment. Winning bidders are those willing to 
accept the lowest premium value.  The programme did not support any 
products in 2014/15 crop year. The 
programme did not support any product 
in 2016.  
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 the 2014/15 crop year, the 
programme supported only cotton (R$2.4 
million and 905,278 tonnes), corn 
(R$256 million and 5,803  million tonnes) 
and oranges (R$47.1  million and 
850,383  tonnes). In 2016, the 
programme supported only wheat 
(404,886 tonnes, R$108  million)  
Source:  MAPA, based on CONAB data.  
4.35.   In 2012, the Federal Government Loan (EGF) programme was replaced by two different 
programmes: Funding for the Producer Price Guarantee (FPPG) for the agro -industry; and 
Financiamento Especial para Estocagem d e Produtos Agropecuários Integrantes da PGPM  (Special 
Financing for Stockholding of Agricultural Products Pertaining to PGPM ) for PGPM agricultural 
products storage for farmers. At the same time, the Special Marketing Credit Line (LEC) was 
replaced by Financiamento Especial para Estocagem de Produtos Agropecuários não Integrantes da 
PGPM  (Special Financing for Stockholding of Agricultural Products Not Pertaining to PGPM)  to cover 
storage of non -PGPM agricultural products for farmers. These tools allow farme rs to withhold the 
sale of products for 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 
rates for FEPM loans stood at 10.5% fo r the harvest year  2016/17 as compared to 5.5% 
in 2013/14, 6.5% in 2014/15, and 8.75% in 2015/16, with reimb ursement deadlines of up to 
240 days, depending on the product. The maximum credit is fixed by product and may reach up 
to R$1.6  million for produce rs or up to 50% of production capacity for agro -industries. The FEE 
does not use the minimum price as a parameter for calculating the amount to be financed.  
4.36.   With 9% and 8.7% inflation in 2015 and 2016 respectively (Table 1.2), regional minimum 
guaranteed prices were kept constant between 2014/15 and 2015/16 for basic and domestic 
wheat, cotton, Arabica coffee, maize, sorghum, jute, rubber and cocoa.32 They were increased by 
about 7% for cassava, 5% for soybeans, 11% for grapes, 7% for peanuts, 7 -8% for most  rice 
categories, 4.5% for bread and high quality wheat, 4.5% for winter crops (oat, canola, barley, 
sunflower, and triticale), 7 -8% for milk; and they were decreased by 16% to 18% for different 
categories of beans. In 2016/17 minimum guaranteed prices wer e raised as follows: 9% for rice; 
18% for cotton; 8.5% for edible beans; 3% for corn; 8.7% for soybeans; 7.5% for sorghum; 7.5% 
for milk; 7.3% for orange; and, 10.5% for winter cereals (wheat, oats, canola, barley, sunflower 
                                                
32 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. WT/TPR/S/358 • Brazil  
 
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  and triticale). According to th e OECD, despite the variety of regional price support programmes, 
prices received by domestic agricultural producers are more or less aligned with international 
levels.33 As a result of the increase in minimum guaranteed prices at a slower pace than inflati on 
and the depreciation of the real relative to the Unites States dollar, price support was further 
lowered in real terms; on the other hand, differences in support level by commodity continue to 
create distortions within the sector.  
4.37.   Budget ed resources for  implementing the PGPM  rose from R$4.5 billion in 2013 to 
R$5.1  billion in 2015 and declined to R$4.4 billion in  2016,  most of which was linked to public 
stocks operations, as compared to an annual average of R$1.6  billion for the period 2008 -11.34 
Between end-May 2015 and end May -2016, total public stocks declined by 42% to about 
1.1 million tonnes due to major drops in the supply of most commodities, mainly maize, beans, 
rice, coffee and sugar, to, inter alia, fight food and nutrition insecurity (e.g. bean s donation) as 
well as to higher than the official minimum enabling operations of AGF; as of end -May 2016 they 
mainly consisted of maize, rice, coffee, manioc flour, wheat, and cores  beans.35 Revenues from the 
sale of public stocks are channelled to the Tre asury or to bodies responsible for storage. Annual 
costs under the PGPM exceed revenue collected with the sale of stocks; nevertheless, b etween 
2013 and 2016 the total balance from trading operations under PGPM (AGF and COV) was 
profitable (Table 4.7). In 2015, according to CONAB data, which usually cover operations under 
both the PGPM and PAA programmes, a subsidy of approximately R$160.4 million was disbursed to 
balance the overall result of the public stocks trading operations; the PGPM stocks are usuall y sold 
whereas those held under PAA are mostly donated to vulnerable people.36 As of 2015, the Brazilian 
network consisted of 1,128 (1,535 in 2011)  warehouses of which 98 were owned by CONAB, with 
a storage capacity of 152,355,268 tonnes of which 2,319,320 were owned by CONAB.  
Table 4.7 PGPM operations, 2013 -16 
(R$ million)  
  2013  2014  2015  2016  
Disbursement (purchase)  
AGF Total 79 84 0 0 
Edible beans  0 72 0 0 
Maize  79 4 0 0 
Wheat  0 8 0 0 
COV Total 1,395 0 0 0 
Coffee  1,029  0 0 0 
Maize  366 0 0 0 
PEP Total 0 0 0 9 
Wheat  0 0 0 9 
PEPRO  Total 484 631 15 69 
Cotton  0 244 0 0 
Maize  455 256 0 0 
Grapes  11 0 0 0 
Natural rubber  0 3 15 0 
Orange  18 47 0 0 
Wheat  0 81 0 69 
Total  1,958  715 15 78 
                                                
33 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016, 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. 
34 In 2015, rubber farmers were the only recipients of deficiency payments under the PEPRO programme 
for an amount of R$15 million (US$4.5 million); in 2014, a total amount of R$360 million (US$108 million) was 
granted to wheat, maize, cotton producers, and smaller amounts to rubber and orange producers . OECD 
(2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: http://www.oecd -
ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -2016_agr_pol -2016-en; 
Ministério da Agricultura, Pecuária e Abastecimento (2015), Plano Agrícola e Pecuário 2015/2016 ; and WTO 
document WT/TPR/S/283/Rev.1, 26 July 2013.  
35 Table 22 in CONAB (2016), Relatório Sintético das Atividades da Conab - Maio de 2016 . Viewed at: 
http://www.conab.gov.br/OlalaCMS/uploads/arquivos/16_08_08_09_37_12_relatorio_sintetico_05 -2016.pdf ; 
and OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: http://www.oecd -
ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -2016_agr_pol -2016-en. 
36 CONAB (2016), Relatório da Administração - Exercício Social de 2015 . Viewed at: 
http://www.conab.gov.br/OlalaCMS/uploads/arquivos/16_05_02_15_06_36_balancocompleto.pdf . WT/TPR/S/358 • Brazil  
 
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    2013  2014  2015  2016  
Revenue (selling)  
AGF Total 359 169 62 109 
Coffee  0 0 1 1 
Edible beans  3 0 21 10 
Maize  0 1 0 59 
Rice 12 163 39 39 
Sisal 3 5 0 0 
Wheat  341 0 0 0 
COV Total 167 231 68 609 
Coffee  0 0 24 394 
Maize  0 5 0 182 
Rice 141 226 44 32 
Wheat  27 0 0 0 
Total  526 400 130 718 
Buying/selling stocks operations  
AGF Disbursement  79 84 0 0 
COV Disbursement  1,395  0 0 0 
Total Disbursement  1,474  84 0 0 
AGF Revenue  359 169 62 109 
COV Revenue  167 231 68 609 
Total Revenue  526 400 130 718 
 Balance  -948 316 130 718 
Source:  CONAB, prepared by MAPA.  
4.1.4.1.2   Measures to promote family farming  
4.38.   Support for family farming remains an important component of agricultural policy, which in 
this area is administered by the SEAD and the MDSA (Section 4.2.2); it is key in fight ing poverty 
and plays a strategic role in controlling prices and the food supply.37 Programmes to promote 
family farming and improve farmer incomes remain unchanged during the review period 
(Table  4.8).38 They include: preferential credit lines (PRONAF), rur al extension (ATER), preferential 
rules in public procurement (PAA, PNAE), rural insurance (PROAGRO MAIS), price guarantees and 
debt rescheduling (Table  4.6, Sections 4.2.4.1 and 4.2.4.2). Access of family farmers to the 
biodiesel market continues to be pr omoted under the Social Fuel Seal initiative (Section 4.4.3.3.2). 
Between 2012/13 and 2016/17, total budgetary outlays for family farming under these 
programmes rose from R$22.3 billion to R$35.3 billion of which PRONAF spending accounted for 
80.7% and 84. 9% respectively (Table 4.8).  
Table 4.8 Budget allocated to family farming programmes and measures, harvest year 
2012/13  
Programme  Description  Budget  
Programme to 
Strengthen Household 
Agriculture (PRONAF)  Preferential credit to small -scale producers with a gross annual 
income of up to R$360,000 per family.  R$30 billion  
Food Purchase 
Programme (PAA)  Support for commercialization of food products from family farms. 
The Government may buy directly from producer s, to form 
strategic public stocks, supply public institutions or make 
donations to vulnerable populations. It may also finance the 
storage of food products by family farming organizations, so as to 
allow later commercialization under more favourable condi tions.  R$2.7 billion  
                                                
37 The share of family units to the total number of agricultural establishments stands at 84.4%. Family 
farming is an important part of food production. In 2006 , its share in total output stood at: 87% for cassava; 
70% for beans; 46% for corn; 38% for coffee; 34% for rice; 58% for milk; 59% for swine; and, 50% of 
poultry. No recent data were available with the authorities. No recent data were available with the authorities. 
FAO online information. Viewed at: http://www.fao.org/family -farming/ countries/bra/en/ ; Schneider S. (2016), 
Family farming in Latin America and the Caribbean: looking for new paths of rural development and food 
security , University of Rio Grande do Sul (UFRGS), published as FAO working paper No. 137, March. Viewed at: 
http://www.fao.org/3/a -i5534e.pdf . 
38 More information on the latest plans in this area is contained in: MDA (2015), Plano Safra da 
Agricultura Familiar 2015 – 2016. Viewed at: 
http://www.mda.gov.br/sitemda/sites/sitemda/files/ceazinepdf/plano%20safra%20cartilha%202015%202016.
pdf; and, MDA (2016), Plano Safra da Agricultura Familiar 2016 –2017. Viewed at: 
http://www.mda.gov.br/sitemda/sites/sitemda/files/ceazinepdf/cartilha_plano_safra_2016_2017_1.pdf . WT/TPR/S/358 • Brazil  
 
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  Programme  Description  Budget  
National School 
Feeding Programme 
(PNAE)  Transfer of Federal Government funds 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 acqu ire 
food products from family farmers.  R$1.2 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 an d resources.  R$500 million  
Family Farming 
Insurance Programme 
(PROAGRO MAIS)  Guarantees for small farmers taking out credit for production 
activities under the PRONAF. The insurance covers 80% of the 
expected revenues. Indemnities are up to a maximum of R $20,000 
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 and north of Minas Gerais. Insurance 
payments are fixed at R$850 and tran sferred in five instalments. 
The number of insured farmers are up to a maximum of 
1.35 million. The programme is finance by a fund composed of 
contributions from municipalities, states and the federal union.  R$412 million  
Price Guarantee 
Programme for Fam ily 
Farming (PGPAF)  An indexation of the credit taken 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 amount 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, incl uding 
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 extreme povert y (with a family income 
of less than R$85 per capita). Those resources, which are non -
refundable, are limited to R$2,400 per family and must be used in 
rural production activities. The resources are divided into three 
parcels conditioned to the implementat ion of production projects 
guided by the technical assistance.  R$81 million  
Total budget   R$35.3  billion  
Source:  MDS online information. Viewed at: http://www.mds.gov.br/segurancaalimentar/fomento -a-
producao -e-a-estruturacao -produtiva -1/fomento -as-atividades -produtivas -rurais ; CAIXA online 
information. Viewed at: http://www.caixa.gov.br/voce/Social/Transferencia/fomento/ index.asp ; 
MDA online information. Viewed at: http://comunidades.mda.gov.br/portal/saf/pr ogramas/ ; 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 .  
4.39.   According to the OECD, existing mechanisms for social protection could protect farmer 
income more effectively and direct investment in infrastructure and public investments could 
trigger agricultural growth, for both commercial farms and sma llholders, more efficiently.39  
4.1.4.1.3   Other measures  
Agricultural/rural insurance  
4.40.   Agricultural insurance support continued to be provided to producers through four main 
programmes, either in the form of insurance premium subsidies covering the difference between  a 
fixed premium and market rates through  a discount in the fee to farmers (fixed percentage), or by 
compensating farmers for production losses due to natural disasters. Two of the programmes 
target the commercial farmers (the rural insurance premium progr amme (PSR) and the general 
agriculture insurance programme (PROAGRO)) and the other two target small -scale family farms 
(the family agriculture insurance programme (PROAGRO MAIS) and the crop guarantee 
programme ( Garantía Safra , GS)) (Section  4.2.4.3).40 The operation of these risk management 
                                                
39 OECD (2016), Agricultural Poli cy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. 
40 The PSR, which covers all agricultural and livestock activities, as well as forestry and aquaculture, has 
grant ed insurance premium subsidies of up to R$192,000 (in 2015 ) and R$144,000 (as of 2016 ) per 
beneficiary to commercial producers who establish contracts with insurance companies listed by the 
government. The PROAGRO and its PROAGRO MAIS, which targets mid -sized and family farmers, offer eligible 
farmers partial compensation of the bank debt on worki ng capital loans used in production of the damaged WT/TPR/S/358 • Brazil  
 
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  programmes is currently shared among federal institutions, including some Ministries and the 
Central Bank. During the review period, a number of initiatives to improve the effectiveness of the 
rural insurance premium pr ogramme  (PSR) included: the development of a model contract to 
facilitate collective negotiation for producers; greater dissemination of the programme availability; 
disclosure of statistical information on the programme; risk analysis; greater involvement of the 
private sector through advisory committees; and, the creation of a productivity register for a 
better estimation of risk (March 2016). Resources allocated to all agricultural insurance 
programmes amounted to R$700 million (US$210 million) in the 201 5/16 agricultural plan; 
subsidy rates ranged from 35% to 100% of the premium, depending on the sector and the risk 
coverage.41 Resources allocated to the rural insurance premium programme (PSR) were cut to 
R$282 million (US$84.6 million) in 2015/16 due to b udgetary constraints. The 2016/17 agricultural 
plan was to strengthen collective negotiation for rural insurance contracts by covering about 
5.5 million hectares, compared to 2.8 million hectares in 2015/1 6, allowing more than 
50,000  producers to benefit f rom the subsidy programme. In  2016/17, resources allocated to rural 
insurance (PSR) subsidies were increased by 42% to R$400  million (US$120 million). The subsidy 
rates ranged from 35% to 55% of the premium, depending on the crop and the risk coverage. The  
main crops insured were soybeans, wheat, maize, grapes and apples; according to the authorities 
the penetration rate of the insurance programme, in terms of the gross value of production, is still 
relatively low for these crops.  
Advance sale facilities  
4.41.   Two facilities allowing farmers to cash in their products prior to sale remain in place and are 
operated by the state -owned Banco do Brasil and/or other private or state -owned financial 
institutions. The Rural Product Certificate (CPR) continues to allow pro ducers 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 Finan ceira" allows for liquidation in cash and is often used as collateral 
for acquiring credit. Farmers may obtain guarantees for the CPR. Farmers and cooperatives which 
sell their products in the futures market may access credit lines by discounting a rural p romissory 
note (NPR) or a rural duplicate (DR), which allow them to receive proceeds from the sale before 
the harvest. Up to 7% of mandatory resources to finance rural credit may be used by banks to 
discount NPRs and DRs (Section  4.2.4.1).  
Zoning, land an d other requirements  
4.42.   Agricultural zoning requirements continue to link agricultural support to environmental 
sustainability.42 They condition producers' eligibility for concessional credit and subsidized 
insurance programmes. Compliance with zoning applies to all concessional credit and all insurance 
premium subsidies for any product covered by the zoning (Section 4.2.4.1). In addition, several 
specific programmes for both the commercial and family farm segments promote sustainable 
agricultural practices; th ey include credit for plantings on unproductive and degraded soils, credit 
for forest planting, and credit to modernize production systems and preserve natural resources 
(Section 4.2.4.1).   
                                                                                                                                                  
crop and provides indemnity on loss of own resources invested in production; most of its resources are directed 
to the southern region and to grain crops, mainly soybeans. To benefit from the PROAGRO facil ities, producers 
must pay a premium fee, set at 2% for the family farmers with PRONAF, and 3% for other producers. 
Producers benefiting from the PROAGRO may not receive subvention through the PSR scheme. Total 
indemnities paid through PROAGRO to producers (including family farmers) rose from R$10.7 billion in 2012/13 
to R$11.1 billion in 2013/14 and R$12.3  billion in 2014/15; most of the indemnities are paid via PROAGRO 
MAIS with an average share of 67% for the period 2012/13 -2014/15. BCB online information . Viewed at: 
http://www.bcb.gov.br/htms/proagro/PROAGRO -relatorioCircunstanciado2012a2015.pdf ; and OECD (2016), 
Agricultural Policy Monitoring and Evaluation 2 016, 16 June. Viewed at: http://www.oecd -
ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -2016_agr_pol -2016-en. 
41 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. 
42 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. WT/TPR/S/358 • Brazil  
 
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  4.43.   Foreign investment in agricultural land remains restricted and adm inistered by the National 
Land Reform and Settlement Institute (INCRA) (Section 2.7).43 The area of agricultural land 
bought or leased by foreigners cannot account for more than 25% of the overall land area in a 
given municipal district; in addition, no mor e than 10% of agricultural land in any given municipal 
district may be owned or leased by foreign nationals from the same country.  
Other  
4.44.   New directions for the restructuring of the Brazilian System of Inspection of Animal Origin 
Products (SISBI -POA), whi ch is part of the Unified Agricultural Health Care System (SUASA), at 
state, district and municipal levels, were announced in October  2015 for consultation and 
suggestions (Section 3.3.3).44 The authorities indicated that this System is applied to animal or igin 
products traded at local markets and does not affect international trade. A plan to develop 
transport infrastructure in the Amazon region, including roads and motorways, ports, railways and 
rivers, in order to reduce export costs by up to 37%, was pre sented in February 2016. In 
accordance with the plan, new port terminals would be auctioned and would increase the export 
capacity by 22 million tonnes (Section  4.5.5.2.2).  
4.2  Energy  
4.2.1   Main features  
4.45.   Brazil, a net exporter of crude oil, remains self -sufficient in primary energy (except for 
natural gas, coal, oil derivatives and hydropower). From January to November 2016 it produced a 
monthly average of 3.13 million barrels  of oil equivalent per day (MMboe/d), up 3.46% compared 
to the same period in 2015, during which 3.03 MMboe/d were produced.45 In 2015, the energy 
matrix  produced 286 ,471 tonnes of oil equivalent (toe) (253 ,174 toe in 2010), which exceeded by 
9.9% (about 5% in  2010) its final consumption.46 The Brazilian energy matrix remains one of the 
greenest i n the world; i n 2015 , 41.2% (39.4% in 2014) of energy came from renewable sources 
compared to an average of less than 15% for the rest of the world. In 2015, it consisted of oil and 
oil derivatives (37.3%), sugarcane (16.9%), natural gas (13.7%), hydropowe r (11.3%), wood and 
vegetable coal (8.2%), coal (5.9%), other renewables (4.7%), uranium (1.3%), and other non -
renewables (0.6%). Manufacturing and transport are the major energy consumers and 
represented 32.5% and 32.2% of final consumption respectively.  
4.2.2   Policy and institutions  
4.46.   Brazil's Ten -Year Plan for Energy Expansion 2024 ( Plano Decenal de Expansão de 
Energia  2024) is focused on striking a balance between the economic growth projections and the 
necessary expansion of energy supply, as well as ensuring  energy supply at the appropriate cost 
and on a technical and environmentally sustainable basis.47 It also, inter alia , aims at raising the 
share of renewable sources in the energy and electricity generation matrixes to 45.2% and 86% 
by 2024 respectively. T o attain these objectives, a total investment of R$1.4 trillion is planned, of 
which 70.6% in oil and natural gas, 26.7% in electricity, and 2.6% in liquid biofuels. Furthermore, 
                                                
43 USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barr iers. Viewed at: 
https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -national -trade -
estimat e. 
44 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June, Paris. Viewed at: 
http://www.oecd -ilibrary.o rg/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. 
45 The IMF Article IV Consultation reports (2014 & 2016) state that Brazil is expected to become a net 
oil exporter in the medium term – apparently using a broader definition of "oil balance". A barrel of oil 
equivalent (BOE) is a term used to summarize the amount of energy that is equivalent to the amount of energy 
found in a barrel of crude oil. IMF (2016), Brazil - Staff Report for the 2016 Article IV Consultation , Country 
Report No. 16/348, 14  October. Viewed at: http://www.imf.org/external/pubs/ft/scr/2016/cr16348.pdf ); 
Online ANP (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis ) November 2016 data. Viewed at: 
http://www.anp.gov.br/WWWANP/images/publicacoes/boletins -anp/boletim_de_novembro -2016.pdf . 
46 Ministério de Minas e Ene rgia/Empresa de Pesquisa Energética (2016), Balanço Energético 
Nacional  2016 - Relatório Síntese - ano base 2015 , June. Viewed at: 
https://ben.epe.gov.b r/downloads/S%c3%adntese%20do%20Relat%c3%b3rio%20Final_2016_Web.pdf . 
47 Ministério de Minas e Energia/Empresa de Pesquisa Energética (2016), Plano Decenal de Expansão de 
Energia 2024 , 26 January . Viewed at: 
http://epe.gov.br/Estudos/Documents/PDE%202024%20RELATORIO%20FINAL.pdf.a0co0ci.partial . WT/TPR/S/358 • Brazil  
 
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  in November 2016, an Investment Partnership Programme set the priority areas for action in 
energy and mining.48 These priorities involved bidding rounds of blocks of oil and natural gas, 
electricity distribution concessions, hydropower plants concessions, and operation/management 
concessions for mining projects with assets owned by the Mineral Resources Research Company 
(CPRM). The National Bank for Economic and Social Development (BNDES) would be in charge of 
the divestment in the electricity distribution service. These bidding rounds provide opportunities 
for both public and privat e (domestic and foreign) companies.  
4.47.   Under the Constitution, Brazil's hydropower sources and mineral resources (including oil and 
gas), whether in the subsoil, the continental shelf, or in the exclusive economic zone, are the 
exclusive property of the Stat e.49 The sector remains dominated by state companies 
(Sections  4.4.3 and 4.4.4). The Ministry of Mines and Energy (MME) implements the general policy 
for the sector and chairs the National Energy Policy Council (CNPE),  which proposes policies and 
regulation s pertaining to hydrocarbons, biofuels, and electricity to the President.50 Policy for the 
ethanol and sugar industry is also determined by the Inter -Ministerial Council for Sugar and 
Alcohol (CIMA). Two autonomous regulatory agencies are 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 Agency for Electrical Energy (ANEEL), 
responsible for regulating and overse eing 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. Gas transmission pipelines 
and storage facilities projects must also be, in general, proposed by MME and undergo an auction 
conducted by ANP. The Energy Research Company (EPE) supports planning, inter alia , in areas 
such as electricity, oil, and natural gas and its derivatives, coal, renewable energy sources and 
energy efficiency.  
4.2.3   Hydrocarbons and biofuels  
4.2.3.1   Oil 
4.2.3.1.1   Main features  
4.48.   Brazil's oil sector accounted for approximately 15% of GDP in 2016 and 14.8%  of raw 
materials exports in 2016. Following a drop in 2012 and 2013, as from 2014, output of oil pick ed 
up as pre -salt production (see below) became effective ; total outp ut was 889.7  million barrels 
in 2015 (31.5% from the "pre -salt" layer, 93.4% from off shore o il rigs), a 17.9% increase 
from 2012.51 Brazil remains a net exporter of crude oil with a net export income (f.o.b.) of 
US$16.4 billion in 2014 and US$11.8 billion in 2015. However, as much of the locally produced 
heavy crude oil cannot be refined do mestically, its refined products are imported. Consequently, 
since 2011, Brazil also remains a net petroleum importer, driven by demand for refined oil 
products much of which originate in the United  States.52 In 2016, for the first time Brazil's crude 
oil exports reached US$410 million  (0.22% of total exports (US$185.2  billion) ). As at end -2015, 
proven reserves of crude oil amounted to about 13 billion barrels, a 19.7% drop from their 2014 
peak level, due partly to the sharp decline in oil prices, which nega tively affected the economic 
viability of part of commercial reserves; in 2014, Brazil ranked 15th among the world's top proven 
reserves holders.53  
                                                
48 Decree No. 8.893, 1 November 2016.  
49 Article 20 of the Constitution.  
50 More information on the sector's institut ional framework is available in WTO document 
WT/TPR/S/283/Rev.1, 26 July 2013.  
51 Ministério de Minas e Energía/Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (2016), 
Anuário estatístico brasileiro do petróleo, gás natural e biocombustíveis -2016. Viewed at: 
http://www.anp.gov.br/wwwanp/images/publicacoes/Anuario_Estatistico_ANP_2016.pdf . 
52 EIU (2016), Industry Report – Energy – Brazil , 30 August.  
53 Proven reserves (based on the analysis of geological and engineering data ) are estimated to be 
commercially recoverable with a high degree of certainty from discovered and evaluated reservoirs, and whose 
estimate takes into consideration the prevailing econ omic conditions, the usually feasible operational methods , 
and regulations under Brazil's oil and tax legislation. Ministério de Minas e Energía/Agência Nacional do 
Petróleo, Gás Natural e Biocombustíveis (2016), Anuário estatístico brasileiro do petróleo,  gás natural e WT/TPR/S/358 • Brazil  
 
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  4.49.   During the review  period, the state -controlled PETROBRAS maintained its dominant position 
in the production,  refining, distribution, and retail market of petroleum and petroleum products in 
Brazil (Section 4.4.3.1.3). Since 2011, the Government has retained 64% of its voting shares and 
13.5% (2015) of its capital stock was held by foreign investors.54 PETROBRAS i s not obliged to 
meet domestic demand of crude oil before exporting the remainder.  During the review period, the 
company continued to account for over 90% of total oil production. Whereas 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. Following years 
of serving as a money -making or social -policy tool, since 2016, Petrobras has been slashing 
spending and selling assets, while also overcoming a crippling corruption scandal.55 The company, 
in debt by some US$125 billion, expects output to fall to about 2.1 million barrels per day (bpd) 
in 2017, though it hopes to reach 2.7 million bpd by 2020. Recent domestic develop ments, in a 
context of low oil prices,  contributed to PETROBRAS' shift from profit to large financial losses 
in 2014-15 (R$56.4 billion), a high debt burden (US$123 billion at current exchange rates in 
September 2016), and a cut in its five -year investment  plan.56 Action, including slashing oil 
production targets and stepping up divestment, is being taken to restore confidence in and finance 
of the company. Its 2017-2021 Business and Management plan calls for investments of 
US$74.1  billion, 82% of which is e armarked for exploration and production (E&P) 
(Section  4.4.3.1.2); the remaining investments are basically aimed at maintaining operations and 
at projects related to oil refining and natural gas output offloading.57  
4.2.3.1.2   Upstream – Exploration and production (E &P) arrangements  
4.50.   Brazil's two parallel regimes (transfer of rights and production -sharing) for selected 
exploration blocks remained unchanged during the review period (Table 4.9).58 The ANP may grant 
authorizations and/or concessions for specific activities  to private companies and consortia 
incorporated under Brazilian law, with headquarters and management in Brazil. Besides creating 
the appropriate entities in Brazil, foreign companies must comply, inter alia , with 
technical -capacity and financial -standing  requirements.  Since 2010, a fully state -owned enterprise 
Pré-sal Petróleo S.A. (PPSA) has represented the Government's interests in the consortia 
performing exploration and production (E&P) operations and managed the commercialization of 
the State's share  of output produced under the production -sharing agreements.  
Table 4.9 Regulatory framework for oil and gas exploration and production, 2017  
 Transfer of rights regime  Production -sharing 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; and Law 
No. 13,356 of November 2016  
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  
Exclusive rights 
transferability  Not transferable  Transferable upon MME 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  Operatorship by Petrobras is no longer 
required as well as minimum 30% interest 
for new pre -salt ac reage  
                                                                                                                                                  
biocombustíveis . Viewed at: 
http://www.anp.gov.br/wwwanp/images/publicacoes/Anuario_Estatistico_ANP_2016.pdf . 
54 The Federal Government directly owns 54% of PETROBRAS' common shares, while the Brazilian 
National Development Bank and Brazil's Sovereign Wealth Fund (Fundo Soberano) each control 5%; the 
privately held shares are traded on BM&F Bovespa, where they are part of the Ibovespa index. The Fe deral 
Government's participation in its voting capital must be at least 50% plus one share ( Article 62 of Law 
No. 9.478, 6 August 1997).  
55 Breaking Views online information, "Under the hammer", 4 January 2017. Viewed at: 
http://www.breakingviews.com/considered -view/brazil -mexico -to-ramp-up-pro-market -oil-makeovers/ . 
56 EIU (2016), Industry Report – Energy – Brazil , 30 August.  
57 PETROBRAS online inf ormation. Viewed at: http://www.petrobras.com.br/en/about -
us/strategy/business -and-management -plan/. 
58 In 2010, Brazil discontinued its exclusive use of the conc ession regime for the exploration and 
production of oil and natural gas, regulated by Law No. 9,478 of 6 August 1997. More information on the 
institutional and procedural aspects of the current regime is available in WTO document WT/TPR/S/283/Rev.1, 
26 July 2013.  WT/TPR/S/358 • Brazil  
 
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   Transfer of rights regime  Production -sharing regime  
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  
Private sector 
participation in 
E&P contracts  Not possible  Winning bidders in E&P auctions can have up 
to 100% participation in the consortium's 
share  
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  
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 (15% of gross 
revenues)  
a  The geographical coordinates of the "pre -salt polygon" are defined in the Annex to Law No. 12,351.  
Source:  Information provided by the authorities.  
4.51.   The production -sharing regime is aimed at lowering the exploration risk, maximizing the 
government take from oil production, and achieving a more equal distribution of its proceeds 
among Brazilians; revenue from production -sharing contracts is to finance education, poverty  
reduction, and environmental initiatives.59 To preserve national interests or achieve other energy 
policy goals, the production -sharing regime includes the possibility of direct contracts (i.e. without 
bidding procedures) with PETROBRAS; nevertheless, ther e have been no such cases so far. The 
selection of winning bids is based on the portion of crude oil output ( excedente em óleo ) to be 
shared between the Government and the contractor, after deducting a percentage of the total 
production volume to cover roy alties and costs incurred by the latter. Stiff local content rules and 
the requirement that PETROBRAS must have a minimum 30% stake in pre -salt fields seem to have 
caused development delays; in 2016, efforts to make these rules more flexible and reform the  
local content requirements were under way in the Congress.60 In November 2016, a law scrapping 
a requirement that PETROBRAS must be the sole operator and hold a minimum 30% stake in the 
country's massive offshore pre -salt oil reserves was passed.61 As a res ult, in 2017, Brazil is to 
auction four pre -salt blocks, the first such effort since 2013, hoping to attract significant foreign 
investment.  
4.52.   Local-content commitments have been among the selection criteria in all concession rounds 
carried out since the 7th Bidding Round in 2005 . On 14 December 2016, the Government cancelled 
local content requirements for fields subject to the 4th Bidding Round of Areas with Marginal 
Accumulations scheduled for 2017.62 A new Local Content Policy is under discussion (see below ). 
Concessionaries that fail to meet their local -content commitments are subject to fines, which vary 
according to the shortfall.63 Between 2011 and 2016, the ANP l evied 110 fines totalling 
R$570  million, of which 62% (R$353.4 million) were applied only to PETROBRAS.  
4.53.   By the end of 2016, 757 fields were under E&P contracts, of which: 322 were blocks in the 
exploration phase; 48 fields in the production development phase; 344 fields in the production 
phase; and 43 fields in the process of being returned to the  ANP. PETROBRAS had participation in 
106 blocks at the exploration phase, of which 54 were exclusive concessions to this company, and 
another 52 in partnership with other firms; Petra Energy had the exclusive operation of 31 blocks; 
Rosneft (Russian Federa tion) operated 16  blocks; and other operators 169 blocks.64 With respect 
                                                
59 Law No. 12.351 of 23 December 2010.  
60 EIU (2016), Industry Report – Energy – Brazil , 30 August.  
61 Breaking Views online information, "Under the hammer", 4 January 2017. Viewed at: 
http://www.breakingviews.com/considered -view/brazil -mexico -to-ramp-up-pro-market -oil-makeovers/ . 
62 CNPE Resolution No. 03, 9 November 2016.  
63 These commitments add an administrative burden involving a tangle of  obligations requiring 
concessionaries to hire certification companies in order to prove compliance; furthermore, there is a lack of 
regulatory provisions on waiver requests by non -compliant concessionaries.  
64 Other companies with contracts, in consortium or not between themselves and with Petrobras, were: 
Queiroz Galvão, Brasoil Manati, Geopak Brasil, Shell Brasil, ONGC Campos, Chevron Brasil, QPI Brasil Petróleo, 
OGX, Total E&P Brasil, BP Energy, Parnaíba Gás, BPMB Parnaíba, Petrogal Brasil, EP Energy Pes cada, Imetame, 
Orteng Óleo e Gás, BG Brasil, Petrosynergy, Silver Marlin, Barra Energia, Brasoil Cavalo Marinho, Repsol WT/TPR/S/358 • Brazil  
 
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  to fields in production, PETROBRAS was the sole contractor for 314, and a joint operator in another 
21 fields.65 Government revenue from E&P activities continues to be collected through  signature 
bonuses and royalties applicable to concession agreements and production share contracts, as well 
as special participation and area retention taxes applicable to concession agreements only.66 
Between 2013 and November 2016, annual revenue from E& P activities dropped from 
R$49.5  billion to about R$18 billion due to the drop in world crude oil prices, exchange rate 
developments and reduced PETROBRAS investment; royalties contributed to 46.9% and special 
participation 38.5% of the total revenue which  was channelled to the Federal Government (42%), 
states and municipalities (58%), and health and education (0.11%).  
4.54.   Several changes were made to E&P -related duty and tax concessions during the review 
period.67 In January 2016, Brazil introduced a Stimulus Programme for the Competitiveness of the 
Supply Chain and the Enhancement of Suppliers in the Oil and Natural Gas Sector ( Programa de 
Estímulo à Competitividade da Cadeia Produtiva, ao Desenvolvimento e ao Aprimoramento de 
Fornecedores do Setor de Petróleo  e Gás Natural , PEDEFOR) aimed at: improving the Local 
Content Policy of the E&P industry, through the legal recognition and appraisal  of initiatives and 
investments contributing to increased competitiveness of suppliers in Brazil; stimulating national 
engineering; promoting technological innovation in strategic segments; expanding the chain of 
suppliers of goods, services and systems produced in Brazil; raising the level of local content (CL) 
of the suppliers already installed; and, stimulating the creatio n of technology -based companies in 
line with the local content policy applicable to the industry.68  
4.55.   To further encourage E&P activities, a number of policy measures were passed on 
3 March  2016 and consisted of: the extension of Round Zero Awa rd contracts s igned in the 
late 1990s in order to allow for further investment in already mature oil fields whose concessions 
end starting in 2025; suspension of concessions of fields which have been unproductive for more 
than six months and whose production will not re start in the next twelve months; and, the 
extension of federal and state tax exemptions  under  the Special Customs Regime (Repetro) 
including import taxes on specific equipment and spare parts imported for direct use in E&P 
activities until 31 December 2020 .69 The Special Incentive Regime (Repenec) continues to suspend 
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.70  
4.2.3.1.3   Downstream  
4.56.   According to the BP Statistical Review of World Energy 2016, Brazil was the sixth -largest oil 
consumer in the world in 2015, consuming 3.2 million barrels/day (b/d) down by 4.2% year on 
year, owing to the recession.71 Brazil 's dependency on imports of refined oil products increased in 
2013 and 2014 but dropped both in 2012 and 2015.72 Although domestic oil refining capacity rose 
by 13.8% in 2012 -15, the refineries utilization dropped to 87.1% due to a decline in consumption, 
and imports of refined products grew by 15.1% (in volume terms) in the period  2012-14 while in 
2015 they dropped by 17.8%. Thirteen out of seventeen refineries belong to PETROBRAS and they 
represented 98.2% of refining capacity in 2015.  Although PETROBRAS f aces more competition in 
the distribution and resale of petroleum products, it remains a leader in both segments.73 As of 
                                                                                                                                                  
Sinopec, Karoon e Nord. Ministério de Minas e Energía/Agência Nacional do Petróleo, Gás Natural e 
Biocombustíveis (2016), Anuário estatí stico brasileiro do petróleo, gás natural e biocombustíveis -2016. Viewed 
at: http://www.anp.gov.br/wwwanp/images/publicacoes/Anuario_Estatistico_ANP_2016.pdf  
65 ANP (2016), Brazilian Oil, Gas, and Biofuels Statistics Yearbook 2016 , pp. 54. Viewed at: 
http://www.anp.gov.br/wwwanp/images/publicacoes/Anuario_Estatistico_AN P_2016.pdf . 
66 Laws No. 9478/97 and No. 12351/10 and ANP data.  
67 More information on this regime is available at WTO document WT/TPR/S/283/Rev.1, 26 July 2013.  
68 Decree No . 8.637 of January 2016. Viewed at: http://www.mdic.gov.br/competitividade -
industrial/pedefor  and http://www.planalto.gov.br/ccivil_03/_Ato2015 -2018/2016/Decreto/D8637.htm . 
69 CNPE Resolution No. 2, 3 March 2016;  Law No. 9,478, 6 August 1997, and Decree No. 6.759, 
5 February 2009 . 
70 Law No. 12,249, 11 June 2010.  
71 EIU (2016), Industry Report – Energy – Brazil , 30 August.  
72 Ministério de Minas e Energía/Agência Nacional do Petróleo , Gás Natural e Biocombustíveis (2016), 
Anuário estatístico brasileiro do petróleo, gás natural e biocombustíveis -2016. Viewed at: 
http://www.anp.gov.br/wwwanp /images/publicacoes/Anuario_Estatistico_ANP_2016.pdf . 
73 PETROBRAS' involvement in downstream activities includes refining, transporting and marketing oil 
and oil -based products, as well as the petrochemicals segment. More information on these operations i s WT/TPR/S/358 • Brazil  
 
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  2015, with 7,500 service stations across the entire Brazilian territory PETROBRAS remained the 
leading company accounting for 28% (30% in 2011) of gasoline and 37% (40% in 2011) of diesel 
distribution.74 
4.57.   Brazil's import tariff for hydrocarbons remains set at zero.  
4.58.   Since 2002, all fuel and oil product prices must be set freely (e.g. without government 
approval) by the market.75 However, in practice, as PETROBRAS continues to have a 
quasi -monopoly over Brazil's refining capacity, and controls most of its distribution and storage 
capacity, it can define ex -refinery prices domestically. By not adjusting fuel prices in line with 
fluctuations in international prices, Brazil has been delaying price hikes to shield domestic prices 
from international volatility. PETROBRAS has been covering the difference between world market 
prices and the domestic price, a policy that has cost the company billions o f dollars and 
contributed to making it the world's most heavily indebted oil company; this policy seems to have 
caused about R$60  billion (US$17.4 billion) of fuel -sales losses in recent years.76 In 2016, 
PETROBRAS announced a new pricing policy for gasolin e and diesel at the refinery gate. According 
to the new policy, fuel prices are monthly updated based on changes in international prices, 
exchange rates, transportation margins, and domestic market conditions, and will not be allowed 
to fall below internat ional parity.77 Furthermore, as part of fiscal adjustments in 2015, the 
Government re -introduced the Contribution for Intervention in the Economic Domain (CIDE), a 
levy applied to gasoline and diesel that had been set to zero in June 2012.78 During the revie w 
period, PETROBRAS raised ex -factory prices of gasoline and diesel progressively to a peak level in 
September 2015, reduced them in the course of 2016 to raise them again at the end of the same 
year to, inter alia , reflect the weakening of the domestic cu rrency against the United States dollar 
that made imports more expensive; between 2013 and 2016, these prices rose by an overall 
16.8% for gasoline and 20.9% for diesel.79 Between 2012 and 2015, average petrol prices rose 
progressively from R$2 .736/litre to  R$3.343/litre, whereas those of diesel rose from R$2 .087/litre 
to R$2 .827/litre.80  
4.2.3.2   Gas 
4.59.   Natural gas extraction increased from 25.8 billion m3 (2012) to 38 billion m3 (2016);  
PETROBRAS accounted for 93.9% of the output in 2016.81 Over the same period, domest ic sales of 
natural gas decreased, from 33.3 billion m3 to 29.4  billion m3, and industrial consumer prices in 
US dollars terms fell from US$15.37 per MMBtu to US$11.54  per MMBtu. To meet reduced 
demand, imports dropped from 17 billion m3 to 11.8  billion  m3 of which 88% via pipelines from 
                                                                                                                                                  
available at PETROBRAS (2016), Management Report 2015 . Viewed at: 
http://www.investidorpetrobras.com.br/en/annual -reports/report -administration . 
74 PETROBRAS Dis tribuidora online information. Viewed at: http://www.br.com.br/pc/a -petrobras -
distribuidora ; Sindicato Nacional das Empresas Distribuidoras de Combustíveis e de Lubrificantes (2016),  
Anuário  estatístico Combustíveis, Lubrificantes & Lojas de Conveniência . Viewed at:  
http://www.sindopolis.com.br/wp -content/uploads/2016/07/ANUARIO_2016_TOT AL_FINAL2_WEB -1.pdf. 
75 ANP online information. Viewed at: http://www.anp.gov.br/wwwanp/precos -e-defesa -da-
concorrencia . 
76 Reuters online information, "Exclusive: Petrobras drags heels on Brazil fuel -price policy", 
3 August  2015. Viewed at: http://www.reuters.com/article/us -brazil -petrobras -fuel-exclusive -
idUSKCN0Q828220150803 ; and Wall Street Journal , "Brazil's Petrobras Raises Fuel Prices", 
30 September  2015. Viewed at: http://www.wsj.com/articles/brazils -petrobras -raises -fuel-prices -14436 08284 . 
77 IMF (2016), Brazil - Staff Report for the 2016 Article IV Consultation , Country Report No. 16/348, 
14 October. Viewed at: http://www.imf.org/external/pubs/ft/scr/2016/cr16348 .pdf. 
78 EIU (2016), Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf . 
79 PETROBRAS ex -factory prices for gasoline rose from R$1,308 per litre  to R$1 .363 per litre 
(November  2013), R$1 .415 per litre (November 2014), R$1 .518 per litre (September 2015), R$1 .464 per litre 
(October 2016), R$1 .410 per litre (November 2016) and R$1 .528 per litre ( December 2016). Those of diesel 
rose from R$1 .398 per litre to R$1 .4168 per litre (March 2013), R$1 .490 per litre (May 2013), R$1 .617 per 
litre (November 2013), R$1 .707 per litre (November 2014), R$1 .772 per litre (September 2015), R$1 .729 per 
litre (Octob er 2016), R$1 .543 per litre (November 2016) and R$1 .690 per litre (December 2016).  
80 Ministério de Minas e Energía/Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (2016), 
Anuário estatístico brasileiro do petróleo, gás natural e biocombustíveis -2016. Viewed at: 
http://www.anp.gov.br/wwwanp/images/publicacoes/Anuario_Estatistico_ANP_2016.pdf . 
81 Ministério de Minas e Energía/Agência Nacional do Petróle o, Gás Natural e Biocombustíveis (2016), 
Anuário estatístico brasileiro do petróleo, gás natural e biocombustíveis -2016. Viewed at: 
http://www.anp.gov.br/wwwanp /images/publicacoes/Anuario_Estatistico_ANP_2016.pdf . WT/TPR/S/358 • Brazil  
 
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  Bolivia and recently from Argentina, whereas the rest came in the form of liquefied natural gas 
(LNG) mainly from Nigeria, Trinidad and Tobago, and Qatar. PETROBRAS is practically the sole 
supplier of natural gas in the cou ntry. Although other agents produce natural gas, they usually sell 
their gas to the state company. In 2016, PETROBRAS was also responsible for 99.97% of imported 
gas, including both LNG and pipeline imports. It owns all gas processing units and regasificat ion 
plants in the country and has participation, either directly or through its subsidiary Petrobras Gas 
(Gaspetro), in 20 out of the 27 local gas distribution utilities. The development of gas discoveries 
at the offshore south -eastern basins is advancing and national production is set to rise 
considerably; its proven reserves were estimated at 0.43 trillion m3 in 2015. Its floating storage 
and regasification units (FSRU) can handle imports of liquefied natural gas (LNG) in periods of 
peak demand for natura l gas. As of December 2016, Brazil hosted 9,409  km (9,489 km in 2012) of 
gas transmission pipelines, 97% of which had PETROBRAS among its shareholders. Furthermore, 
69% of the pipelines were operated by Transpetro, another PETROBRAS subsidiary.  
4.60.   The regula tory framework for natural gas activities remains unchanged.82 In addition to the 
E&P regime (Section 4.4.3.1.2), a 2009 Gas Law ( Lei do Gás ) governs auctions for concessions in 
specific cases, including transportation via newly built pipelines considered o f "general interest", 
and storage in hydrocarbon reservoirs returned to the State.83 The duration of the concession for 
storage activities is not established by law, but by the MME upon consultation with the ANP. The 
Gas Law authorizes private entities to b uild customized distribution facilities if the distribution 
operator of the respective State cannot respond to their specific needs.84 Ownership of any such 
infrastructure must be transferred (against compensation) to the State; its operation and 
maintenanc e must be entrusted to the state distribution operator.  
4.61.   Regulatory framework improvements are under consideration in the context of a Federal 
Government Gas to Grow ( Gás para Crescer ) initiative aimed at stimulating natural gas 
participation in the Brazil ian energy mix through action in areas such as: natural gas 
commercialization; an entry -exit tariff model; shared access in essential facilities; stimulation of 
harmonization of state -level and federal regulations; incentives for the development of natural  gas 
demand; harmonization of the electricity and natural gas sectors; independent integrated 
management of the transmission system and storage facilities; commercialization policies for 
sharing natural gas in production sharing contracts across the union;  taxation challenges; and, 
support to negotiations on Bolivian gas contracts or other alternatives.85 Following consultations 
with academics, companies, state entities and other stakeholders, in 2016 a working committee 
was set up to discuss and develop reg ulatory improvements in detail.  
4.2.3.3   Biofuels  
4.2.3.3.1   Ethanol  
4.62.   During the review period, Brazil retained its position as the world's second -largest producer 
and exporter of ethanol as output grew from 23.5 million m3 to 30.2 million m3 and exports slowed 
down (2012 -2014) before rising by 33.6% in 2015.86 In 2016, the total number of sugar -ethanol 
mills was estimated at 378  units; PETROBRAS is a shareholder in 11 units which processed about 
40 million tons per year of sugarcane during the review period. In the 2012/13 har vest, they 
                                                
82 More information on the regulatory and procedural aspects of the natural gas regime is available in 
WTO document WT/TPR/S/283/Rev.1, 26 July 2013.  
83 This regime does not apply to natural gas pipeline s covered by international treaties; an authorization 
regime, administered by the ANP, applies in this case. Law No. 11.909, 4 March 2009.  
84 Under the Constitution, the federal states have exclusive rights over the local distribution and sale of 
piped natu ral gas; concessions for these activities are regulated and  granted at sub -federal level.  
85 Under an entry –exit gas tariff system, reservation of capacity is split into entry capacity, to transport 
gas from the injection points to a virtual balancing point , and exit capacity, to transport gas from the balancing 
point to the exit points in the system.  
86 Renewable Fuels Association online data. Viewed at: 
http://ethanolrfa.org/resources/industry/statistics/#1454098996479 -8715d404 -e546; Ministério de Minas e 
Energía/Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (2016), Anuário estatístico brasileiro do 
petróleo, gás natural e biocombustíveis -2016. Viewed at: 
http://www.anp.gov.br/wwwanp/images/publicacoes/Anuario_Estatistico_ANP_2016.pdf ; and USDA Foreign 
Agricultural Service (2016), Brazil Biofuels Ann ual - Annual Report 2016 , Global Agricultural Network Report 
Number BR16009, 12 August. Viewed at: 
http://gain.fas.usda.gov/Recent %20GAIN%20Publications/Biofuels%20Annual_Sao%20Paulo%20ATO_Brazil_8
-12-2016.pdf . WT/TPR/S/358 • Brazil  
 
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  produced 1 billion litres of ethanol. In its Strategic Plan 2017 –2021, PETROBRAS foresees a 
regression of its biofuels production.87 The market share of PETROBRAS in Brazilian ethanol 
production is quite insignificant. The ethanol fuel industry r emained dependent on sugar output, 
support and pricing developments as well as petrol prices subsidization over recent years (see 
below and Section  4.4.3.1.3).88  
4.63.   Since April 2010, Brazil has reduced its import tariff on ethanol (HS 2207) from 20% to zero 
by including it in its national basic "list of exceptions" to the MERCOSUR CET ; as of 
24 September  2015, this and other exceptions were extended until 31 December 2021 
(Sections  2.6.2.1.1, 3.1.3.1 and 3.1.3.2).89  
4.64.   The change in ethanol blend ratio in gasolin e is a policy instrument used when the biofuel 
supply is low. During the review period, the mandatory ethanol blend ratio, which may range from 
18% to 27.5% , was raised for regular gasoline from 20% (October 2011 -April 2013) to 25% 
(May 2013-March 2015) an d as from 16 March 2015 it has been at 27% (E27).90 The blending 
requirement for premium gasoline remains unchanged at 25%.91 Ethanol prices are not controlled, 
and fluctuations in relative prices lead to changes in consumption patterns; as sugarcane 
represe nts 60% -70% of the cost of producing ethanol, high sugar and therefore ethanol prices act 
as a disincentive to the use of ethanol at petrol stations.92 Between  2012 and 2015, the average 
retail price for ethanol rose progressively from R$1,943 per litre to R$2,230 per litre.93 This 
increase was driven by the re -introduction of the CIDE levy on gasoline, the maintenance of a zero 
rate of PIS and COFINS taxes on ethanol and their increase for gasoline, and the readjustment of 
the ex -refinery prices for gasoline  A and diesel (Section 4.4.3.1.3), as well as the 34% rise in 
demand for hydrated ethanol in 2015.94  
4.65.   During the review period, in addition to mandatory fuel blending, other support measures 
for the production and consumption of ethanol involving cross -subsidization, credit facilities and 
tax incentives remained in place.95 Sugarcane producers from the north  and northeastern states 
received a direct subsidy, the Regional Producer Subsidy; as of July 2015, no such subsidy has 
been paid to producers due to the country's economic recession. Tax incentives for flex -fuel cars 
(88.4% of all motor vehicles sales in  2015), involving lower rates for the tax on Industrialized 
Products (IPI), the Contribution to the Social Integration Program/Contribution for Financing S ocial 
Security (PIS/COFINS), and the state tax for circulation of goods and services (ICMS), continued 
to play an important role in supporting ethanol consumption (Sections 3.3.1 and 4.3.5).96 
                                                
87 PETROBRAS (2016) , Petrobras' Strategic Plan 2017 -2021. Viewed at: 
http://www.slideshare.net/petrobrasri/plano -estratgico -e-plano -de-negcios -e-gesto -20172021 . 
88 EIU (2016), Industry Report – Energy – Brazil , 30 August.  
89 Ministry of Development, Industry and Commerce (MDIC)/Chamber of Foreign Trade (CAMEX) 
Resolution 92,  24 September 2015. Viewed at: www.camex.gov.br/legislacao/interna/id/1455 . 
90 USDA Foreign Agricultural Service (2016), Brazil Biofuels Annual - Annual Report 2016 , Global 
Agricultural Netw ork Report Number BR16009, 12 August. Viewed at: 
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual_Sao%20Pau lo%20ATO_Brazil_8
-12-2016.pdf . 
91 OECD (2016), Agricultural Policy Monitoring and Evaluation 2016 , 16 June. Viewed at: 
http://www.oecd -ilibrary.org/agriculture -and-food/agricultural -policy -monitoring -and-evaluation -
2016_agr_pol -2016-en. 
92 Sugarcane is virtually the sole source of feedstock for ethanol production in Brazil. EIU (2016), 
Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf . 
93 Ministério de Minas e Energía/Agência Nacional do Petróleo, Gás Natural e Bi ocombustíveis (2016), 
Anuário estatístico brasileiro do petróleo, gás natural e biocombustíveis -2016. Viewed at: 
http://www.anp.gov.br/wwwanp/images/publicacoes /Anuario_Estatistico_ANP_2016.pdf . 
94 EPE (2016), Análise de Conjuntura dos Biocombustíveis Ano 2015 . Viewed at: 
http://www.epe.gov.br/Petroleo/Documents/An%C3%A1lise%20de%20Conjuntura%20dos%20Biocombust%C
3%ADveis%20 -
%20boletins%20peri%C3%B3dicos/An%C3%A1lise%20de%20Conjuntura%20d os%20Biocombust%C3%ADvei
s1%20 -%20Ano%202015.pdf . 
95 USDA Foreign Agricultural Service (2016), Brazil Biofuels Annual - Annual Report 2016 , Global 
Agricultural Network Report Number BR16009, 12 August. Viewed at: 
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual_Sao%20Paulo%20ATO_Brazil_8
-12-2016.pdf . 
96 According to National Association of Motor Vehicle Manufact urers (ANFAVEA) data cited in USDA 
Foreign Agricultural Service (2016), Brazil Biofuels Annual - Annual Report 2016 , Global Agricultural Network 
Report Number BR16009, 12 August. Viewed at: WT/TPR/S/358 • Brazil  
 
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  Preferential tax treatment for ethanol compared to gasoline unde r both the Contribution for 
Intervention in Economic Domain (CIDE) and PIS/COFINS programmes remains in place; in 
addition, several states provide differential treatment for ethanol by using different rates of state 
taxes for circulation of goods and servi ces (ICMS) on ethanol (12% -27%) and gasoline 
(25% -31%) (Section 3.3.1).  
4.66.   BNDES continues to provide specific administered interest rate credit lines for the sugar, 
ethanol, and bioenergy industries to fund investments on sugarcane production (Section 4.2.4 ), 
expansion of industrial capacity for sugar and ethanol, sugarcane biomass technology, 
cogeneration, logistics, and multimodal transportation. Total financing for the industry in 2015 was 
R$2.74 billion, down 60% from 2014 (R$6.8 billion) due to financia l constraints faced by the 
Federal Government.97 The ethanol stock programme, also known as the BNDES PAISS 
programme, which offered up to R$500 million per beneficiary  and was due to expire in 2013, was 
extended until  2015.  
4.2.3.3.2   Biodiesel  
4.67.   During the review pe riod, Brazil's biodiesel output grew steadily from 2.7 million m3 (2012) 
to 3.9 million m3 (2015), inter alia , supported by the increase of the biodiesel use mandate (see 
below). In 2015, Brazil remained the world's second -largest producer of biodiesel aft er the 
United  States.98 As at December  2016, Brazil had 48 plants authorized to produce biodiesel and 
their capacity represented approximately 1.9 times the mandatory biodiesel production to be 
blended in mineral diesel; PETROBRAS' four plants accounted for  6.8% of total installed capacity.  
4.68.   The customs tariff on biodiesel (HS 3826) remains at 14%.  
4.69.   The 2004 National Biodiesel Production Programme (PNPB) remains in place. Its aim is to 
promote domestic biodiesel production, reduce petroleum import dependency,  lower pollutant 
emissions and health -related costs, generate jobs and income, and alleviate regional economic 
disparities by passing on benefits to family farmers. It is implemented through blending 
requirements and auctions promoted by ANP. Buyers in auc tions are mineral diesel producers and 
importers, and PETROBRAS has a significant presence. Biodiesel producers holding a Social Fuel 
Seal Certificate sell first in these auctions (see below and Section 4.2.4.1.3).   
4.70.   Since 2014, the mandatory blending ratio  of biodiesel has been raised, and it is set to rise 
further. It rose from 5% (January 2010) to 6% (July 2014), and then 7% (November  2014).99 The 
mandatory biodiesel -use ratio is to continue rising, to 8% in March 2017, 9% in March 2018, and 
10% in March 2 019.100 As of January 2016, a voluntary biodiesel blending ratio above the 
mandatory 7% level for several heavy duty fleets like long haul trucks, buses, rail transportation, 
and agricultural machinery was authorized; however, if requested by the end users, the MME has 
the authority not only to authorize but also set the actual voluntary blend to be used by the 
fleet.101 Furthermore, in 2016, the National Congress set the need to conduct tests in diesel 
engines over a period of 12 to 36 months to verify the fea sibility of a 10% and 15% blending 
ratio; if results are positive, up to 15% biodiesel mandate could be an option by March 2019.  
                                                                                                                                                  
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual_Sao%20Paulo%20ATO_Brazil_8
-12-2016.pdf . 
97 USDA Foreign Agricultural Service (2016), Brazil Biofuels Annual - Annual Report 2016, Global 
Agricultural Network Report Number BR16009, 12 August. Viewed at: 
http://gain.fas.usda.gov/Recent%20GAIN%20Publicatio ns/Biofuels%20Annual_Sao%20Paulo%20ATO_Brazil_8
-12-2016.pdf . 
98 Ministério de Minas e Energía/Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (2016), 
Anuário estatístico brasileiro do petróleo, gás natural e biocombustíveis -2016. Viewed at: 
http://www.anp.gov.br/wwwanp/images/publicacoes/Anuario_Estatistico_ANP_2016.pdf ; and Statista online 
data. Viewed at: https://www.statista.com/statistics/271472/biodiesel -production -in-selected -countries/ . 
99 Law No. 13.033/2014; and Ministério de Minas e Energía/Agência Nacional do Petróleo, Gás Natural e 
Biocomb ustíveis (2016), Anuário estatístico brasileiro do petróleo, gás natural e biocombustíveis -2016. Viewed 
at: http://www.anp.gov.br/wwwanp/images/publicacoes/Anua rio_Estatistico_ANP_2016.pdf . 
100 Law No. 13.263/2016. Viewed at: http://www.planalto.gov.br/ccivil_03/_Ato2015 -
2018/2016/Lei/L13263.htm . 
101 National Energy Policy Council  (CNPE) Resolution No. 3, 21 September 2015. Viewed at: 
http://www.mme.gov.br/documents/10584/2431527/Resolu%C3%A7%C3 %A3o_3_CNPE_Biodiesel.pdf/d7480
b33-c6b4-45fe-a20b-19b0e23f3293 . WT/TPR/S/358 • Brazil  
 
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  4.71.   Similarly to ethanol, biodiesel benefits from cross -subsidization through federal tax 
exemptions and incentives for PIS/PASEP and COFINS taxes depending on the nature of the raw 
material, size of producer and region of production, in order to encourage the production of 
biodiesel and to promote social inclusion.102  
4.72.   The domestic biodiesel market remains regulated by the Government through an ANP 
operated electronic auction system (reverse auctions), which gives preference to producers 
certified with the Social Fuel Seal.103 The ANP sets the volume of government purchases and a 
maximum price that suppliers must underbid. The distributo rs are responsible for the 
commercialization of biodiesel.104 PETROBRAS operates as a system administrator and has no 
interference with the volumes to be acquired by distributors.105 Biodiesel prices received by 
producers are determined by the auction system. At auctions held between June 2014 and 
October  2016, average prices followed an overall rising trend and ranged from R$1,884.15 per m3 
(June  2014) to R$2,855.10 per m3 (October 2016).106  
4.2.4   Electricity  
4.2.4.1   Main features  
4.73.   Between 2011 and 2015, Brazil's installed ca pacity and power generation continued to grow 
faster than electricity consumption. In 2015, Brazil had 140.6 GW of installed capacity for 
electricity generation, generated 581.5 TWh of electricity, and consumed 522.8 TWh; these figures 
represented annual i ncreases of 20.1%, 9.3% and 8.9% respectively compared to 2011 levels.107 
Hydroelectric sources accounted for 64% (70.4% in 2011) of installed capacity, followed by 
thermal (30.2%), wind (3.5%) and, nuclear (2.4%) sources.108 Brazil's electricity imports in 20 14 
accounted for  5.7% of domestic supply, down from 7.4% in 2012; the drop in the hydropower 
share due to Brazil's exceptional drought in 2015 and 2016 was compensated by the output of 
thermal power plants which increased the cost of energy.109 Electricity p roduced by the Itaipu 
                                                
102 According to ANP data soybean oil represents 78% of total biodiesel feedstock, followed by animal 
tallow (18%); therefore, the profitability of the sector is highly dependent on oilseed pri ces. Ministério de Minas 
e Energía/Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (2016), Anuário estatístico brasileiro do 
petróleo, gás natural e biocombustíveis -2016. Viewed at: 
http://www.anp.gov.br/wwwanp/images/publicacoes/Anuario_Estatistico_ANP_2016.pdf . 
103 To obtain this certification, biodiesel producers must purchase a minimum share of raw materials 
from family farmers registered under the  PRONAF ( Section 4.2.4.3). 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. In 
the 2014/2015 harvest biodiesel producers purchases stood at approximately R$ 4 bil lion. 
104 Ministério de Minas e Energia/Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (2016), 
Resolução ANP nº 30 – June, 2016 . Viewed at: http://www.anp.gov.br/wwwanp/?dw=81898 . 
105 Ministér io de Minas e Energia Portaria Nº 476 de 15 de agosto de 2012 . Viewed at: 
http://www.lex.com.br/legis_23593044_PORTARIA_N_476_DE_15_DE_AGOSTO_DE_2012.aspx . 
106 USDA Foreign Agricultural Service (2016), Brazil Biofuels Annual - Annual Report 2016 , Global 
Agricultural Network Report Number BR16009, 12 August. Viewed at: 
http://gain.fas.usda.gov/Recent%20GAIN%20Publications/Biofuels%20Annual_Sao%20Paulo%20ATO_Brazil_8
-12-2016.pdf . 
107 WTO document WT/TPR/S/283/Rev.1, 26 July 2013; and Ministério de Minas e Energia/Empresa de 
Pesquisa Energética (2016), Balanço Energético Nacional 2016  - Relatório Síntese - ano base 2015 , June. 
Viewed at: 
https://ben.epe.gov.br/downloads/S%c3%adntese%20do%20Rela t%c3%b3rio%20Final_2016_Web.pdf . 
108 There are two operational nuclear reactors in Brazil; a third reactor was due to come online by 
January 2016 but construction of the plant has become paralysed due to investigations by federal prosecutors 
into corruption . 
109 Ministério de Minas e Energia/Empresa de Pesquisa Energética (2015), Balanço Energético Nacional 
2015 - ano base 2014 . Viewed at: http://www.mme.gov.br/web/guest/publicacoes -e-indicadores/balanco -
energetico -
nacional?p_p_auth=dEK5UxZd&p_p_id=20&p_p_lifecycle=0&p_p_st ate=normal&p_p_mode=view&_20_struts
_action=%2Fdocument_library%2Fview_file_entry&_20_redirect=http%3A%2F%2Fwww.mme.gov.br%2Fweb
%2Fguest%2Fpublicacoes -e-indicadores%2Fbalanco -energetico -
nacional%3Fp_p_auth%3DdEK5UxZd%26p_p_id%3D20%26p_p_lifecycle%3D0%26p_p_ state%3Dnormal%26
p_p_mode%3Dview%26_20_entryEnd%3D20%26_20_displayStyle%3Ddescriptive%26_20_viewEntries%3D1
%26_20_viewFolders%3D1%26_20_expandFolder%3D0%26_20_folderStart%3D0%26_20_action%3Dbrowse
Folder%26_20_struts_action%3D%252Fdocument_library%252Fview% 26_20_folderEnd%3D50%26_20_entry
Start%3D0%26_20_folderId%3D1143895&_20_fileEntryId=2860427 . WT/TPR/S/358 • Brazil  
 
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  plant and imported from Paraguay continues to account for most of Brazil's imports.110 In 2015, 
Brazil imported 33,651.5 GWh from Paraguay and 913.2  GWh from the Bolivarian Republic of 
Venezuela, and exported 219  GWh to Argentina and 0. 4 GWh to Uruguay. Although under the 
Ten-Year Plan for Energy Expansion 2024 (Section 4.4.4.2), the share of hydropower capacity is to 
rise and a number of auctions have been conducted, construction of several hydroelectric plants is 
behind schedule. The m ain power consumption groups consist of manufacturing (37.6%), 
residential consumers (25.1%), service activities (17.5%) and agriculture (5.1%).111  
4.74.   ELETROBRAS continues to play a major role in the electricity sector; as at March 2017, the 
Federal Government  owned 40.99% of its common shares, BNDES/BNDESPAR 15.99%, Brazilian 
Government funds 3.44%, and others 19.94%; in addition, its preferred shares, i.e. those with a 
higher claim on its assets and earnings than common stock, are owned by BNDES/BNDESPAR 
(2.73 %) and others funds (16.89%).112 In the third quarter of 2016, the company accounted 
for 32% of Brazil's installed generation capacity, as well as 47.1% of its transmission lines 
compared to 35% and 55% in 2010, respectively. As of January 2017, there were  77 companies 
responsible for transmission networks and 64 distribution companies (same as in 2013), including 
state- and privately -owned enterprises. ELETROBRAS' financial problems remain an issue; in 2014 
and 2015, it registered losses of R$3 billion and  R$14.4 billion, respectively, mainly due to its 
distribution subsidiaries results, GSF (generation scale factor) risk and compulsory loan 
contingencies, and has had its American Depository Receipts suspended by the New York Stock 
Exchange (NYSE) between M ay and October 2016.113 The Government was committed to 
improving ELETROBRAS' indebtedness by making advanced payments of R$2.9 billion for future 
capital increase in 2016. Although ELETROBRAS is likely to remain a state -owned company, it is 
expected to priv atize its distribution companies by the end of 2017.  
4.2.4.2   Policy and institutions  
4.75.   Brazil's Strategic Planning 2014 -17 for the electricity sector consolidates strategic objectives 
and initiatives to improve its performance.114 Its objectives include: the developm ent and 
competitiveness of the electricity market; the balanced expansion of the electricity sector ensuring 
energy security; the supply of adequate and qualitative electricity services; the boosting of the 
efficiency and innovation of the power industry; the search for qualitative and expeditious 
decision -making and simplification and reduction of bureaucracy; and, increased coherence of 
regulatory acts.  
4.76.   The electricity sector's institutional framework remains unchanged and 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 Grid 
(SIN); the Energy Research Enterprise (EPE), conducting informative studies fo r energy 
                                                
110 Itaipu is jointly administered by Brazil through ELETROBRAS and Paraguay; each country has rights 
on half of its capacity.  
111 ANEEL online data. Viewed at: 
http://relatorios.aneel.gov.br/_layouts/xlviewer.aspx?id=/Rela toriosSAS/RelSampClasseCons.xlsx&Source=htt
p://relatorios.aneel.gov.br/RelatoriosSAS/Forms/AllItems.aspx&DefaultItemOpen=1 . 
112 ELETROBRAS consists of the following 1 4 companies: Holding, CGTEE, Chesf, Eletronorte, 
Eletronuclear, Eletrosul, Furnas, Amazonas  Energia, Amazonas Geração e Transmissão, Distribuição Acre, 
Distribuição Alagoas, Distribuição Piauí, Distribuição Rondônia, Distribuição Roraima, and it owns half of Itaipu 
Binacional. ELETROBRAS had 50.93% of the shares of the company Celg Distribuição S.A. (CELG) an energy 
distribution company operating in the Brazilian state of Goiás until November 2016 when Enel Brasil S.A. 
(subsidiary of the Italian Enel S.P.A.) acquired 94.6% of CELG's shares in a public tender. Moreover, the 
ELETROBRAS holding cont rols the Electric Energy Research Center (Eletrobras Cepel), and Eletropar 
Participações S.A. (Eletrobras Eletropar). It owns 47 hydroelectric power plants, 121 thermal power plants, 
2 nuclear power plants, 60 wind farms, and 1 solar power plant. ELETROBRA S (2016), Annual and 
Sustainability Report 2015 . Viewed at: http://www.eletrobras.com/elb/main.asp?Team={D00A1456 -A64A -
40DC -B7D8 -BB2E23A8FACE} ; ELETROBRAS on line information. Viewed at: 
http://ri.eletrobras.com/pt/ri/Paginas/Capital -Social.aspx ; ENEL online information. Viewed at: 
https://www.enel.com/content/dam/enel -common/press/en/1666524 -1_PDF -1.pdf; and Investopedia online 
information. Viewed at: http://www.investopedia.com/t erms/p/preferredstock.asp . 
113 In May 2016, the NYSE suspended the trading of the ADRs issued by ELETROBRAS because it was 
not in a position to file its annual reports on Form 20 -F for the years ending on 31 December 2014 and 2015; 
Both the 2014 20 -F and 20 15 20 -F were filed in October 2016, and ELETROBRAS' ADRs resumed their NYSE 
trading as from 13 October 2016. EIU (2016), Industry Report – Energy – Brazil , 30 August.  
114 ANEEL online information. Viewed at: http://www.aneel.gov.br/planejamento -estrategico -ciclo-2014-
2017. WT/TPR/S/358 • Brazil  
 
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  policy -making; the Electric Energy Commercialization Chamber (CCEE), a non -profit private entity 
managing electricity trading; and the Electricity Industry Monitoring Committee (CMSE), which 
monitors the continuity and safety of electricity supply .  
4.2.4.3   Regulatory and operational aspects  
4.77.   During the review period, the main regulatory framework of the electricity sector remained 
virtually unchanged. Law No.  12,783 of 11 January 2013, which governs electricity generation, 
transmission, and distribution co ncessions, was amended by Law No.  13.203 of 8 December 2015, 
which provides for the renegotiation of the hydrological risk of electricity generation and 
establishes the bonus for the granting of a concession.115  
4.78.   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 and carried out by the CCEE.116 The generation concessions granted for 
hydropower 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 conditi ons set by 
the ANEEL, including the remuneration tariffs to be applied, a guaranteed supply quota allocation, 
and quality standards. Quotas are allocated through contracts and they are revised periodically by 
ANEEL. Regarding self -generation of hydropower,  concessions for up to 50MW may be extended 
once for up to 30 years; generators may sell any non -consumed surplus in the spot market and 
those not linked to the National Interconnected Grid ( SIN) are not bound by the 50MW threshold. 
In the case of thermo -electric power generation, the renewal of concessions is allowed for up to 
20 years and must be requested by the concessionary at least 24  months prior to the expiration of 
the concession.  
4.79.   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.117 Hydroelectric projects with capacity greater than 50 MW require 
public -provider concessions in order to trade part o f their electricity via auctions. Authorizations for 
building and operating new thermoelectric generators and certain hydropower plants are granted 
for 30 years, non -renewable. A renewable period of 35 years is envisaged for new hydroelectric 
generators. C oncessions for building hydropower plants with a capacity greater than 50 MW are 
granted for 35  years, non -renewable.  In 2015, legislation in this area was modified to include the 
possibility of undertaking existing hydropower plants auctions as a means of  collecting a bonus for 
the concession (a payment for the concession right); two MME ordinances were issued to define 
the possible bidding evaluation criteria, i.e. through the offering of the lowest tariff (2015) and the 
additional possibility of bidding by offering the largest payment of bonus (2017).118 On 
25 November 2015, Brazil held one auction under the new regulatory framework that led to the 
concession of 29 existing hydropower plants, totalling 6 GW of installed power, representing a 
R$17 billion bo nus payment for these concessions. As of March  2017, no auctions have been held 
under the 2017 alternative criterion.  
4.80.   Concessions for transmission and distribution of electricity can be extended once for up to 
30 years. In the case of transmission, annual revenue in the form of a user transmission fee paid 
by the generators and consumers is fixed by ANEEL. In  2015,  the Government extended for 
30 years the concessions of 39 energy distributors that were maturing between 2015 and 2017, 
subject to quality, eco nomic, financial and management goals; the signing of these extension 
contracts represented the beginning of a new tariff cycle aimed at reaching a competitive tariff 
                                                
115 MME online information. Viewed at: 
http://www.mme.gov.br/documents/10584/496731/Lei_n_13.203 -2015/f6c5c545 -1cce-40c5-8ba2-
3150861c3774?version=1.0 . 
116 ANEEL may delegate its responsibility for conducting energy auctions to the CCEE.  
117 Thermoelectric and hydroelectric power plants with generation capacities of up to 5 MW and 1 MW, 
respectively, need only be registered with ANEEL.  
118 Law No. 12.783/2013 modified by Law No. 13.203/2015, and Auction ANEEL No. 15/2015. Portal 
Brasil online information. Viewed at: http://www.brasil.gov.br/economia -e-emprego/2015/11/leilao -de-
hidreletricas -negocia -r-17-bilhoes -em-outorgas . WT/TPR/S/358 • Brazil  
 
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  level within five  years, i.e. by 2020.119 The generation, transmission, and distribution of  electricity 
concessions that are not renewed are granted in a competitive auction, for up to 30 years.  
4.81.   Brazil's electricity market remains organized around two trading environments: the 
Regulated Contracting Environment (ACR) and the Free Contracting Env ironment (ACL). In the 
ACR, distribution companies hold the exclusive right to supply electricity to captive consumers. 
These companies are not allowed to operate in the ACL, where large consumers (above 3MW/year)  
may purchase energy from generating or tra ding companies through freely negotiated bilateral 
contracts. As a general rule, generating companies may sell electricity in both environments; 
however, those registered as self -producers (i.e. generating energy for their own consumption) 
may sell their s urplus electricity only to distribution companies in the ACR, under a 
transaction -specific authorization from the ANEEL.120 In 2016, the size of the ACL market with 
more than 6,000 (1,427 in 2012) entities registered as free consumers at the CCEE was estimat ed 
to account for 25% (27.2% in 2012) of domestic electricity consumption.  
4.82.   Energy auctions organized by the MME are the main procurement mechanism for 
distribution companies to acquire energy from generating companies. Under auction rules, all 
distributio n companies buy energy at the same price.121 Between 2013 and 2016, 19 energy 
purchase auctions for new power plants were conducted. As of  2016, more than 20,000  MW of 
new capacity was contracted by distribution companies, with contracts ranging from 15 to 
30 years. 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 t he integrated foreign trade 
system SISCOMEX (Section 3.1.1).  
4.83.   Average electricity supply tariffs dropped by 13% in 2013  and then rose progressively 
by 8.8% (2014), 42.6% (2015), and 6.7% (2016) to R$ 421.72 per MWh excluding taxes; these 
developments (exce pt for 2015) were broadly in line with the average inflation rate of 6.7% in the 
period 2012 -15 (Section 1.2.1).122 These tariff developments, inter alia , were due to: the 
mid-2012 compensation to some electricity companies in return for an early renewal of contracts 
due to expire in 2015 at lower tariffs; electricity tariff cuts for households and businesses in 2013 
compensated by subsidies to distributors as energy costs rose when low water levels at 
hydro -plants forced a turn to more expensive thermal plan ts (Section 4.4.4.1); the 
post-October  2014 sharp rise in tariffs; and, the 2015 above -average rainfall and a fall in 
electricity demand allowing dialling down of generation from thermal plants.123  
4.84.   The tariffs charged to the final consumer remain regulated by the ANEEL and vary 
depending on operational and other costs incurred by the distribution company. Several changes 
were introduced during the review period. Since 2015, a tariff flag system, which allows the 
monthly pass -through of the extra costs of gen erating thermal energy to consumers, has been 
applied by all concessionaires connected to the SIN and as of 1 July 2015 it was expanded to 
energy distribution concessionaires; the system is aimed at preventing energy distributors 
experiencing financial pro blems again.124 Electricity tariffs continue to ensure cross -subsidization 
among different consumer categories; in 2016, aquafarming, agricultural irrigation, and 
manufacturing benefited from 52.8%, 41.5% and 11.3% lower electricity tariffs (excluding taxes)  
                                                
119 EBC Agência Brasil online informatio n, "Aumento da oferta de energia pode estabilizar tarifas 
em 2016", 1 January 2016. Viewed at: http://agenciabrasil.ebc.co m.br/economia/noticia/2016 -01/aumento -
da-oferta -de-energia -pode-estabilizar -tarifas -em-2016. 
120 Decree No. 5.163 of 30 July 2004.  
121 The price is set by auction. Generators must offer quotas of energy to be sold at decreasing prices 
until the sum of the quo tas 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 distribution companies in their 
purchases of quotas.  
122 ANEEL online data. Viewed at: 
http://relatorios.aneel.gov.br/_layouts/xlviewer.aspx?id=/Relatorios SAS/RelSampRegCC.xlsx&Source=http://r
elatorios.aneel.gov.br/RelatoriosSAS/Forms/AllItems.aspx&DefaultItemOpen=1 . 
123 EIU (2016), Industry Report – Energy – Brazil , 30 August.  
124 The system is operated through three flags depending on the conditions of electr icity generation: 
green flag (favourable generation conditions, no tariff increase); yellow flag (less favourable generation 
conditions, tariff increase by R$0.015 per kWh); and, red flag - tier 1 (more costly generation conditions, tariff 
increased by R$0 .030 per kWh) and red flag - tier 2 (even more costly generation conditions, tariff increase by 
R$0.045 per kWh consumed). ANEEL online information. Viewed at: http://www.aneel.gov.br/bandeiras -
tarifarias . WT/TPR/S/358 • Brazil  
 
- 122 - 
 
  than those set for services activities, respectively.125 The tax burden on end -user electricity tariffs 
remains significant and differs greatly across consumer groups; in 2016, taxes and charges raised 
the average electricity supply tariff by 38.8% whereas tax-inclusive tariffs for aquafarming, 
agricultural irrigation, manufacturing, and services activities reflected an increase of 12.8%, 
14.4%, 37.4% and 42.2%, respectively.126 According to a 2011 Federation of Industries of the 
State of Rio de Janeiro (FIRJA N) survey at the time of the previous TPR, Brazil had the fourth (out 
of 27 countries) highest electricity price for industrial consumers; some 48.6% of that price was 
attributable to federal and state -level taxes (PIS/COFINS and ICMS), as well as to secto r-specific 
charges.127 No recent appraisal on Brazil's electricity tariff competitiveness and the budgetary 
outlays for tariff subsidization was available from the authorities.  
4.85.   During the review period, the energy development account (CDE), which is a fund r egulated 
by the MME and managed by ELETROBRAS, continued to be used for: the promotion of universal 
access to electricity (see below); the granting of electricity tariff discounts to various end -users 
(e.g. low income consumers, agricultural producers, and  irrigation); power generation in isolated 
electrical systems (fuel consumption account – CCC); payment of compensation for concessions; 
the maintenance of a moderate tariff; and, the promotion of the competitiveness of energy 
produced from coal among othe rs.128 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, 
the annual payments made by the concessionaires, fines paid to ANEEL, and Federal Governmen t 
credits. On 17 November 2016, Law No. 13,360 set the objective of promoting a better distribution 
of CDE resources, as well as measures to promote the privatization of power distribution 
companies whose concessions expired and were not renewed but remain  operated by ELETROBRAS 
because a legislative amendment provided for the possibility of their privatization . Between 2013 
and 2015, the CDE funding rose from R$14.1 billion to R$25.2  billion, and in 2016 dropped to 
R$18.3 billion of which 34.7% was channel led to the fuel consumption account and 33.7% to 
support tariff discounts to certain end -users; in 2015 and  2016, 74.9% and 64.8% of its funding 
originated in fees for the use of the distribution and transmission systems.  
4.86.   No major changes were made to the  2003 Light for All ( Luz Para Todos ) programme, aimed 
at promoting universal access to electricity, in addition to the subsidized electricity tariffs to 
low-income families, involving invoice discounts ranging f rom 10% to 100%. As of 
November  2015, the pro gramme had brought electricity to 15.6 million (11.2 million in 2009) 
households in remote areas.129 Originally intended to terminate in 2008, the programme was 
included in the Programa de Aceleração do  Crescimento  (PAC) and extended until 2018.130 
By 2015, an  amount of R$22.7 billion was invested under the programme, of which R$16.8 billion 
was financed by the Federal Government, and the remainder with resources from state 
governments and energy distributors.  
                                                
125 ANEEL online data. Viewed at: 
http://relatorios. aneel.gov.br/_layouts/xlviewer.aspx?id=/RelatoriosSAS/RelSampRegCC.xlsx&Source=http://r
elatorios.aneel.gov.br/RelatoriosSAS/Forms/AllItems.aspx&DefaultItemOpen=1 . 
126 There are federal (PIS/COFINS), state (ICMS), local (CIP or COSIP (Contribuição para Custe io do 
Serviço de Iluminação Pública or Contribution for the Cost of Public Lighting) and other taxes/taxes (CCC 
(Conta de Consumo de Combustíveis or Fuel Consumption Account); ECE (Encargo de Capacidade de 
Emergência or Emergency Capacity Charge); RGR (Res erva Global de Reversão or Global Reservation of 
Reversion); TFSEE (Taxa de Fiscalização de Serviços de Energia Elétrica or Electric Energy Services Supervisory 
Tax); CDE (Conta de Desenvolvimento Energético or Energetic Development Account); ESS (Encargos  de 
Serviços do Sistema); P&D (Pesquisa e Desenvolvimento e Eficiência Energética or Research and Development 
and Energetic Efficiency); ONS (Operador Nacional do Sistema or National System Operator); and, CFURH 
(Compensação financeira pelo uso de recursos  hídrico or Financial compensation for the use of water 
resources) included in the electricity bill. The Brazil Business , "Electricity Prices in Brazil". Viewed at: 
http://the brazilbusiness.com/article/electricity -prices -in-brazil ; and ANEEL online data. Viewed at: 
http://relatorios.aneel.gov.br/_layouts/xlviewer.aspx?id=/RelatoriosSAS/RelSampClasseCons.xlsx&Source=htt
p://relatorios.aneel.gov.br/RelatoriosSAS/Forms/AllItems.aspx&DefaultItemOpen=1 . 
127 The sector -specific charges fin ance 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. WTO document WT/TPR/S/283/Rev.1, 26 July 2013.  
128 ANEE L online information. Viewed at: http://www.aneel.gov.br/informacoes -tecnicas/ -
/asset_pu blisher/CegkWaVJWF5E/content/conta -de-desenvolvimento -energetico -
cde/654800?inheritRedirect=false . 
129 Portal Brasil online information, "Programa Luz para Todos chegou a 15,6 milhões de brasileiros em 
12 anos", 11 November 2015. Viewed at: http://www.brasil.gov.br/infraestrutura/2015/11/programa -luz-para-
todos -chegou -a-15-6-milhoes -de-brasileiros -em-12-anos. 
130 Decree No. 8. 493, 15 July 2015.  WT/TPR/S/358 • Brazil  
 
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  4.3  Manufacturing  
4.3.1   Main features  
4.87.   Brazil has a large and  diversified manufacturing sector, but while parts of it are thriving, 
others are facing hard times, in part because they are weakly integrated into the world economy 
(Sections 4.3.5 and 4.3.6).131 Manufacturing's share of total value added decreased progres sively 
from 12.6% in  2012 to 11.7% in 2016 (Table 1.1); its share in employment also declined slightly 
from 12.8% in 2012 to 12.2% in 2014. No labour or total factor productivity data are available 
from the authorities; in 2014, its employment share was vi rtually equal to its share in gross value 
added, which implies that labour productivity in manufacturing was much higher than in 
agriculture. Manufacturing continued to register a trade deficit during the review period,  although 
a reduction in unit labour costs and currency depreciation contributed to a rise in exports of 
manufactured goods.132 It accounted for 37.9% of total mercha ndise exports in 2016 (33.8% 
in 2012), mainly transport equipment, machinery , chemicals, and  iron and steel, as compared 
to 77.1%  (73.1% in  2012) of total imports with major categories remaining chemicals, electrical 
machines, non -electrical machinery and transport equipment (Chart 1.1).133  
4.3.2   Policy and institutions  
4.88.   During the review period, as a response to the persisting effects of the economic crisis and 
the growing trade deficit in the manufacturing sector, the Plano Brasil Maior  (2011 -14), aimed at 
stimulating industrial production and technology development,  replaced the Productive 
Development Policy (2008 -10); virtually all tool s used under these plans, including credit lines 
under administered interest rate or favourable conditions, public procurement preferences 
(until  2016 and June 2017), fiscal incentives, and border measures, remain in place 
(Sections  3.2.4, 3.3.1, 4.3.3 and  4.3.4).134 In April 2016, the More Productive Brazil ( Brasil Mais 
Produtivo ) initiative , aimed at increasing the productivity of up to 3,000 participating SMEs by at 
least 20% , was launched (Section 4.3.4).  
4.89.   The Ministry of Industry, Foreign Trade and Servi ces ( Ministério da Indústria, Comércio 
Exterior e Serviços  (MDIC)) remains, inter alia, responsible for policy development on industry, 
trade and services, which is implemented through its four agencies: the Secretariat of Industrial 
Development and Compet itiveness (SDCI); the Secretariat of Foreign Trade (SECEX); the 
Secretariat of Trade and Services (SCS); and, the Secretariat of Innovation and New Business 
(SINN).135  
4.90.   Several structural issues continue to affect the international competitiveness of Brazili an 
manufacturing, where a few key reforms could unleash significant unexploited potential and play a 
leading role in raising productivity. According to the OECD, in addition to low integration into 
international trade, the sector faces high production cost s, extensive red tape, insufficient 
infrastructure, skill shortages, and an overly complex tax system that all together make up the 
so-called "Brazil cost" holding back domestic industry, which has not benefited enough from the 
global trends that have shap ed industrial production elsewhere.136 On the other hand, it has many 
assets to build on, starting with the benefits of scale from its large domestic market but also the 
                                                
131 Arnold, J. (2016), Brazil: A tale of two industries or how openness to trade matters , OECD online 
article, 22 March. Viewed at: https://oecdecoscope.wordpress.com/2016/03/22/brazil -a-tale-of-two-industries -
or-how-openness -to-trade-matters/ . 
132 IMF (2016), Brazil - Staff Report for the 2016 Article IV Consultation , Country Report No. 16/348, 
14 October. Viewed at : http://www.imf.org/external/pubs/ft/scr/2016/cr16348.pdf . 
133 In 2015 Brazil broke into the top ten leading iron and steel exporters reaching eighth position 
compared with its 11th place in 2014. WTO (2016), World Trade Statistical Review 2016 , 21 July.  Viewed at: 
https://www.wto.org/english/res_e/statis_e/wts2016_e/wts2016_e.pdf . 
134 More information on t he Plano Brasil Maior  is available in WTO document WT/TPR/S/283/Rev.1, 
26 July 2013.  
135 MDIC online information. Viewed at: http://www.mdic.gov.br/ . 
136 Costs beyond the influence of firms make it harder for them to com pete with external competitors 
both on domestic and export markets, limiting their ability to exploit scale economies. Distorted incentives, 
including low competitive pressures, mean that firms will not exploit the full potential of internal productivity 
improvements. They can also impede the functioning of market mechanisms that reallocate resources towards 
the most productive firms, including new entrants. OECD unclassified document TAD/TC/WP (2016)13/FINAL, 
8 September 2016; and OECD (2015), OECD Economi c Surveys: Brazil 2015 , November. Viewed at: 
http://www.oecd.org/eco/surveys/Brazil -2015-overview.pdf . WT/TPR/S/358 • Brazil  
 
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  opportunity to develop value chains from its existing areas of strong comparative advant age – 
such as the agro -food chain, minerals, or "pre -salt" (Section 4.4.3.1) – to develop a more 
buoyant, more diversified, more sophisticated manufacturing base. Competitive services could 
enable and maximise the benefits from structural reform (Section 4 .5.1).  
4.3.3   Border measures  
4.91.   Since 2012, the average MFN applied tariff for manufacturing products remained virtually 
unchanged and stood at 11.8% in  2017 (HS definition, Table 3.3). Almost all of the 113 HS tariff 
lines whose applied rates were increased in 20 16 were manufactured goods; similarly, 131  out of 
the 140 HS tariff lines whose rates decreased were manufactures. Clothing, textiles, and transport 
equipment benefit from the highest tariff protection among WTO categories of products, with 
average MFN app lied tariffs of 35.0%, 22.6%, and 18.3%, respectively. The number of 
manufactured products subject to  non-automatic import licensing is to decline when the single 
window reforms will be  implemented . Recourse to trade defence mechanisms was strengthened 
(Sections  3.1.5 and 3.1.6).  
4.92.   Several export incentives are available (e.g. drawback programme,  refund of Social 
Integration Program (PIS) and Contribution for the Financing of Social Security (COFINS) taxes, 
official export financing, the Special Regime for t he Acquisition of Capital Goods by Exporting 
Enterprises (RECAP)),  special  zones (e.g. export -processing zones), and action under the June 
2015 National Export Plan ( Plano Nacional de Exportações ). Additional tax refunds also continue to 
be available under  the Reintegra scheme (Section 3.2.4.1).137 Under Law 13,043 of 2014, the 
Reintegra scheme, first introduced in 2011 as part of Plano Brasil Maior  and due to expire at 
end-2013, was reinstated and made permanent. Although the Reintegra refund rate was to var y 
from 0.1% to 3% of export revenue, with a possible additional credit of 2% subject to certain 
criteria, during the review period, the rate of additional tax refunds was reduced as part of the 
Government's budget -cutting efforts.138 Its maximum refund rate was reduced temporarily from 
3% of the export revenue to 1% in March 2015, and 0.1% in 2016; the National Export Plan set 
the rate at 2% in 2017 and 3% in 2018. In order to be eligible, exports must not contain more 
than 40% imported content. Exceptions ap ply to goods deemed high -tech (such as aircraft, 
electronics and pharmaceuticals), which are allowed a 65% imported -content limit. The scope of 
the programme, which covers 8,620 -8,630 tariff items most ly manufactures, was expanded in 
September 2014 (Decree  8,304) to, inter alia,  add sugar, ethanol, and cellulose to the list of 
eligible products. Under the Brazilian tax system, companies that tend to systematically 
accumulate tax credits and do not generate enough tax debits to offset them, are entitled to t he 
suspension of some indirect tax on their purchases of inputs and capital goods, in order to avoid 
such accumulation; the functioning of this regime is currently under consideration under the WTO 
Dispute Settlement Mechanism (Section 2. 5.1).  
4.3.4   Domestic su pport  
4.93.   Domestic support, amplified under the Plano Brasil Maior  (Section 4.3.2) and aimed at 
producers and exporters of manufactured products, continued under several programmes. As of 
end-August 2016, the following general incentives remained in place: fi nancing in the form of 
administered interest rate or concessional loans by the National Bank for Economic and Social 
Development (BNDES), the Brazilian Innovation Agency (FINEP) or federal states; government 
procurement preferences to local suppliers expan ded in 2014 to cover all manufactured goods 
(until 2016 and 2017); federal, state and municipal tax and non -tax incentives (e.g.  IPI tax 
reductions on several consumer and capital goods, rental subsidies, and donation of land sites); 
R&D and information te chnology tax incentives; and, subsidized equipment financing through 
                                                
137 The stated purpose of REINTEGRA is to exempt taxes that are charged throughout  the production 
process of industrialized goods, such as ISS, IOF and CIDE ( Section 3.2.4.1). EIU (2016), Country Commerce – 
Brazil , September; and USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barriers . Viewed 
at: https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -national -trade -
estimate . 
138 According to Decree 8,415, artic le 2 (27 February 2015), export revenue is understood as: for direct 
exports, the value of the goods on board (f.o.b.); and, for exports through exporting commercial enterprise s 
(ECE), the value in the fiscal invoice of goods bought by the ECE. Presidência  da República online information. 
Viewed at: http://www.planalto.gov.br/ccivil_03/_Ato2015 -2018/2015/Decreto/D8415.htm#art10Exceptions . WT/TPR/S/358 • Brazil  
 
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  BNDES' industrial -financing arm FINAME.139 Industry -specific incentives are available for some 
sectors, including automotive, aeronautics, computing and inf rastructure (Sections 4.3.5 
and 4.3.6).140 Some support programmes are linked to Basic Productive Process (PPB) criteria, 
which constitute agreed manufacturing steps established to recognize the degree of production 
step-related local content of a product (Sections 3.2.5 and 3.3.1).  
4.94.   Public  procurement preferences to domestic suppliers (until December 2016 and 
June 2017), tax reductions or financing from public banks linked to production step -related local 
content requirements have to some extent shielded certain domestic producers from fore ign 
competition (Sections 3.3.1 and 3.3.6).141 BNDES provided approximately R$20.8 billion  to the 
Investment Maintenance Program (PSI) in  2015, compared to US$18 billion (R$42.5 billion) 
in 2014, to finance the purchase of locally manufactured capital goods at administered interest 
rates.142 BNDES also provides similar financing for wind and solar farm development, contingent 
upon progressively more stringent production step -related local content requirements. Wind 
turbine suppliers of any origin are also eligi ble to BNDES administered interest rate  financing, 
provided the wind towers are built with at least 70% Brazilian steel by 2016, and photovoltaic 
suppliers use 60% Brazilian -made components by 2020. BNDES funding for FINAME was 
approximately US$22.9 billio n (R$53.85 billion) in 2014 and R$24.9 billion in 2015. The planned 
total value of foregone tax revenue (i.e. tax expenditure) under the Plano Brasil Maior  was 
estimated at R$44.2 billion in 2012, R$46.1 billion in  2013, and R$46.2  billion in 2014, mainly 
channelled to the manufacturing sector; no recent implementation data in this area were available 
from the authorities.  
4.95.   On 19 December 2013, the European Union requested consultations with Brazil with respect 
to certain measures concerning, inter alia , taxation and charges in the automotive sector, the 
electronics and technology industry, and tax advantages for exporters; on 22 March 2015 a panel 
was composed to examine the case (Section 2. 5.1). On 2  July 2015, Japan requested consultations 
with Brazil wit h respect to the same measures; on 29  September 2015, a panel was composed 
with the same members as the other dispute to examine the case following a harmonized 
procedure.  
4.96.   The 2016 More Productive Brazil ( Brasil Mais Produtivo ) initiative, which has a fir st-year 
budget of R$50 million, will apply lean manufacturing principles through consultancy services in 
partnership with the National Service of Industrial Education ( Serviço Nacional de Aprendizagem 
Industrial  (Senai)) (Section 4.3.2).143 Under the new ini tiative, diagnostics are to be undertaken 
based on lean manufacturing methodology, which is based on a reduction of the most common 
waste from the production process, such as overproduction, waiting time, transportation, excess 
processing, inventory moveme nts and defects. Consulting services will last 120 hours and cost a 
total of R$18,000 per company, of which R$15,000 will be subsidized by the More Productive Brazil 
programme, and the remaining amount may be paid by the company or with the BNDES Card, 
which has not been used so far. In its first phase, the programme's eligible activities, due to their 
greater adherence to lean manufacturing tools, will be metal mechanics, clothing and footwear, 
furniture, and food and beverages.  
                                                
139 On 31 Decemb er 2016, fourteen decrees providing for preferences in government procurement to 
local suppliers expired; another two such decrees remained in force until March and June 2017. Furthermore 
the authorities indicated that BNDES financing is consistent with WT O agreements. EIU (2016), Country 
Commerce – Brazil , September.  
140 EIU (2016), Country Commerce – Brazil , September.  
141 The authorities indicated that their policy aims at developing the domestic industry and bringing new 
technology to the sector rather than  shielding domestic producers. They also indicated that production steps –
related requirements cannot be equated to local content requirements and their objection to characterizing the 
margin of preference in government procurement as local content require ments. OECD (2015), OECD 
Economic Surveys: Brazil 2015 , November. Viewed at: http://www.oecd.org/eco/surveys/Brazil -2015-
overview.pdf . 
142 USTR (2016), 2016 National Trade Estimate Repo rt on Foreign Trade Barriers . Viewed at: 
https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/201 6-national -trade -
estimate . 
143 Portal Brasil online information. Viewed at: http://www.brasil.gov.br/economia -e-
emprego/2016/04/br asil-mais-produtivo -vai-ampliar -a-produtividade -industrial . WT/TPR/S/358 • Brazil  
 
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  4.3.5   Automotive sector  
4.97.   Brazil's  inward -focused and protected automotive sector accounted for 0.6% of gross value 
added (or 1.1% including automotive parts and accessories) and 4.6% of manufacturing output 
in 2014; in 2016, the motor vehicle industry employed 104,412  persons (down by nea rly 
30,931  from the peak in 2013) in 67 factories distributed across eleven states.144 Brazil's motor 
vehicle industry, the world's ninth largest in 2015 (down from fifth in 2013), is facing severe 
challenges with production dropping from 3.7 million units i n 2013, a peak year, to 2.4 million in 
2015 (83.1% passenger cars) and a further 2.2 million units in 2016; its installed capacity is 
estimated at 4.5 million units, suggesting that there is overcapacity.145 During the review period, 
tariff-jumping FDI inflo ws continued, inter alia , to defend foreign investors' domestic market 
shares (Section 4.3.3); investments now tend to be more focused on sales within Brazil rather 
than part of a regional strategy implemented as a result of high tariff protection on autom otive 
products from outside MERCOSUR. Most foreign producers have not integrated their Brazilian 
plants into global value chains; productivity has fallen sharply behind car manufacturers in the 
region, who are fully integrated into global production chains  and have achieved remarkable gains 
in global market share.146  
4.98.   During the review period, as a result of the recession and higher interest rates, the 
domestic sales of motor vehicles fell progressively from 3.8 million units in 2012, a peak year, to 
2.6 million in  2015 and 2 million in 2016, thus making Brazil slip from the world's fourth -largest 
vehicle market in 2013 to the seventh place in 2015.147 Sales remain dominated by European 
carmakers followed by US and Asian producers.148 High taxation, weak competiti on, and border 
protection continue to keep cars relatively expensive.149 Currency appreciation and the 
attractiveness of the Brazilian market lifted the import penetration ratio from 7% in 2006 to 27% 
in December 2011, but as of early 2016 it was reduced to 15.1% due to the impact of the increase 
in the Industrial Production tax (IPI) on automotive imports (see below) and currency devaluation; 
imports dropped progressively and drastically from 737,907 units in 2012 and 717,027 in 2013 to 
                                                
144 According to the authorities the conclusion that the automotive sector is well protected is not based 
on any reliable evidence as imports of vehicles from 2009 to 2014 were greater than exports . IBGE Sistema de 
Contas Anuais online data. Viewed at: 
ftp://ftp.ibge.gov.br/Contas_Nacionais/Sistema_de_Contas_Nacionais/2014/tabelas _xls/sinoticas/tab13_2.xls ; 
ANFAVEA (2017), Anuario da Industria Automobilistica Brasileira 2017 , January. Viewed at: 
http://www.virapagina.com.br/anfavea2017/#I/z ; EIU (2016), Industry Report – Automotive – Brazil – 
3rd Quarter , 16 July. Viewed at: http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf ; and 
Arnold, J. (2016), Brazil: A tale of two industr ies or how openness to trade matters , OECD online article, 
22 March. Viewed at: https://oecdecoscope.wordpress.com/2016/03/22/bra zil-a-tale-of-two-industries -or-
how-openness -to-trade-matters/ . 
145 Associação Nacional dos Fabricantes de Veículos Automotores (ANFAVEA) and Secretariat of Foreign 
Trade (SECEX/MDIC) data; International Organization of Motor Vehicle Manufacturers online da ta. Viewed at: 
http://www.oica.net/category/production -statistics/2015 -statistics/ ; and EIU (2016), Industry Report – 
Automotive – Brazil – 3rd Quarter , 16 July. Viewed at:  
http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf . 
146 For example, Mexican plants produce 53 cars per worker and year, as opposed to 27 in Brazil, 
although the cars produced in Mexico are on average smaller models. Arnold, J. (2016), Brazil: A tale of two 
industries or how openness to trade matters , OECD online article, 22 March. Viewed at: 
https://oecdecoscope.wordpress.com/2016/03/22/brazil -a-tale-of-two-industries -or-how-openness -to-trade -
matters/ . 
147 EIU (2016), Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf . 
148 In 2015 Fiat -Chrysler Auto (UK) held a market share of around 17% of sales, ahead of General 
Motors (16%) an d Ford (15%). Volkswagen (VW) had a share of 14%, while Renault -Nissan held a combined 
share of 10%. Hyundai -Kia (8%), Honda (6%) and Toyota (7%) make up the rest of the top eight in the 
market. Volkswagen, Fiat, GM and Ford have dominated Brazil for years  but pressure is coming from global 
rivals like Kia, Hyundai, Honda, Nissan and BMW, as well as new players like China's Chery, Geely, JAC and 
Hafei, and India's Tata and Mahindra. Arnold, J. (2016), Brazil: A tale of two industries or how openness to 
trade matters , online OECD article, 22 March. Viewed at: 
https://oecdecoscope.wordpress.com/2016/03/22/brazil -a-tale-of-two-industrie s-or-how-openness -to-trade -
matters/ ; and EIU (2016), Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1584 474142&mode=pdf . 
149 Brazil's car affordability (the price of an item as a percentage of monthly personal disposable 
income) rank ranges from 30th to the 45th out of 60 countries depending on the type of vehicle. EIU (2016), 
Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf ; and UNSD Comtrade data for HS 
positions 8702, 8703, and 8704.  WT/TPR/S/358 • Brazil  
 
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  237,140  in 2016.150 Exports used to account for nearly one third of car output but this share fell to 
11.5% in  2014, owing to an erosion of the country's competitiveness and fluctuations in 
Argentina's economy, Brazil's main market; the real's devaluation and the steady reductio n of 
domestic output and sales boosted the share of exported cars to 16.8% in 2015 and 26.7% 
in 2016.151 Rising total motor vehicle export earnings and units have fallen from a 2013 peak 
(about US$8.7 billion, 596,924 units) to partly recover in 2016 (US$7.6  billion, 577,077  units). A 
weaker real helped the automotive industry to stabilize production in 2016 as contracting domestic 
demand was offset by an increase in exports of Brazilian vehicles and import substitution by new 
producers' models.152  
4.99.   Border prot ection, including a 35% MFN tariff on motor vehicles and the IPI tax reduced 
rate under the INOVAR -Auto scheme (see below), remains unchanged. In March 2012, a bilateral 
agreement with Mexico was renegotiated imposing a tariff rate quota limiting the duty -free entry 
of motor vehicles to protect domestic producers; t his arrangement was extended in March  2014 
and again in March 2015 for an additional four -year period .153 Under the renegotiated agreement, 
US$1.56 billion of duty -free vehicle imports were agreed for the first year of the agreement; this 
amount will rise by 3% each year until the agreement expires in 2019 and the countries return to 
a free -trade regime. Similar agreements were concluded with Uruguay (December 2015) and 
Argentina (June 2016). As of October 2015, the import duty on electric and cell -powered vehicles 
was removed, and the 35% import duty on other hybrid vehicles was reduced, depending on 
certain specifications such as energy efficiency, in a bid to make these vehicles more attractive to  
buyers compared to the flex -fuel vehicles.154  
4.100.   Since the last TPR, the industry's support programme for the period 2013 -17, the 
Programa de Incentivo à Inovação Tecnológica e Adensamento da Cadeia Produtiva de Veículos 
Automotores (Incentive Programme for T echnological Innovation and Consolidation of the 
Automotive Vehicle Supply Chain) or INOVAR -Auto, which is aimed at promoting technological 
development in the Brazilian automotive industry and addressing competition challenges, has been 
subject to changes (Table 4.10). INOVAR AUTO was, inter alia , mod ified by Decree No. 8.015 of 
17 May 2013, which altered accreditation conditions for beneficiary companies by requiring more 
manufacturing steps to be performed in Brazil in order to benefit from IPI reduction (see below). 
Law 12.996 of 18  June 2014 elaborated the traceability criteria applicable to the car parts used by 
the beneficiaries of the scheme.  
Table 4.10 Timetable for compliance with INOVAR -Auto Programme  requirements, 
2013 -17 
Requirement  2013  2014  2015  2016  2017  
Minimum manufacturing steps in Brazil  
Light vehicles 
Heavy vehicles  8 out of 12  
9 out of 14  9 out of 12  
10 out of 14  9 out of 12  
10 out of 14  10 out of 12  
11 out of 14  10 out of 12  
11 out of 14  
Minimum local investment in R& D  (% of gross revenues (after tax))  
 0.15 0.3 0.5 0.5 0.5 
                                                
150 Secretariat of Foreign Trade (SECEX/MDIC) data; EIU (2016), Industry Report – Automotive – Brazil 
– 3rd Quarter , 16 July. Viewed at: http://www.eiu.com/FileHandler.ashx?issue_id=15 84474142&mode=pdf . 
151 Despite being among the largest producer of cars in the world, Brazil ranked only 24th in automotive 
exports (in value terms) in 2015. Brazilian vehicle exports have the third -lowest foreign value added content 
among the 62 countries in the OECD -WTO Trade in Value Added database. Arnold, J. (2016), Brazil: A tale of 
two industries or how openness to trade matters , OECD online article, 22 March. Viewed at: 
https://oecdecoscope.wordpress.com/2016/03/22/brazil -a-tale-of-two-industries -or-how-openness -to-trade -
matters/ ; EIU (2016), Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf ; and WTEx online data. Viewed at: 
http://www.worldsto pexports.com/car -exports -country/ . 
152 EIU (2016), Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=15844741 42&mode=pdf . 
153 Wall Street Journal , "Brazil, Mexico Agree to Extend Auto Trade Agreement", 9 March 2015. Viewed 
at: http://www.wsj.com/articles/brazil -mexico -to-renew -auto-trade -agreement -1425899470 ; and EIU (2016), 
Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_i d=1584474142&mode=pdf . 
154 Brazil's use of flex -fuel vehicles and production of ethanol makes it a global leader in cleaner fuels 
and vehicles. Flex -fuel vehicles accounted for 88.4% of total sales of passenger cars and light vehicles in 2015. 
EIU (2016), Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf . WT/TPR/S/358 • Brazil  
 
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  Requirement  2013  2014  2015  2016  2017  
Engineering, basic industrial technology and supplier training  (% of gross revenues (after tax))  
 0.5 0.75 1 1 1 
Tagging/labelling (% of vehicles produced)  
 36 49 64 81 100 
Source:  Decree No. 7.819 of 2012 and modifications established by Decree No. 8.015 of 2013.  
4.101.   INOVAR -Auto, operated by the MDIC, provides for a reduction of the  IPI tax rates on 
automobiles manufactured or imported by accredited companies.155 This discount is in the form of: 
presumed IPI tax credits; and, reduced IPI tax rates on the importation of vehicles originating in 
certain countries as well as on certain domestic vehicles. Accreditation is granted, under certain 
conditions, for: companies that manufacture automobiles in Brazil; companies that obtain official 
approval for their plans to invest in domestic production of items listed in the INOVAR -Auto Decree 
(52 tariff lines); and, for companies without manufacturing activities that market au tomobiles in 
Brazil.156 To be accredited, companies must comply with energy -efficiency requirements and meet 
at least three of the following four conditions: perform a minimum number of manufacturing steps 
in Brazil for at least 80% of vehicles produced; inv est 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/labelling programme ( Programa 
de Etiquetagem V eicular , PBEV) for a minimum percentage of the company's output.157 These 
requirements were set to rise progressively in the period 2013 -17 (Table 4.10). Companies that 
only trade automotive products are not subject to the requirement of minimum manufacturin g 
steps in Brazil; however, to qualify for the programme, they must meet the remaining three 
conditions.  
4.102.   Accredited companies under INOVAR -Auto may benefit from IPI tax credits, which can be 
used under certain conditions, to offset the IPI otherwise due on  the domestic sale of automobiles 
covered by the programme.158 IPI tax credits can be used to offset up to 30 percentage points of 
the IPI tax due on the sale of automobiles. Any remaining tax credits can be used to offset up to 
30 percentage points of the I PI due on the automobiles imported by the company, but only up to a 
maximum of 4,800 units per  year. Companies that manufacture or plan to manufacture 
automotive products in Brazil could benefit from a 30 percentage point IPI tax reduction on 
imports of ve hicles originating in MERCOSUR and Mexico until the expiry of the INOVAR -Auto 
regime.159  
4.103.   INOVAR -Auto has further encouraged tariff -jumping FDI which has stepped up investment 
plans and gradually increased production step -related local content. During the re view period, 
importing companies  such as BMW (Germany), Hyundai, Kia Motors, and Chery (China) have 
invested in local plants, whereas Jaguar Land Rover (owned by Tata of India) began plant 
construction and JAC Motors (China) have plans in this area.160 No in formation on the amount of 
total domestic support to the automotive industry under INOVAR -Auto (e.g. foregone tax revenue 
and budgetary outlays) and an appraisal on its achievements (e.g. investment, output, 
employment, and exports) were available from the  authorities.  
4.104.   In June and October 2014, in the context of the WTO Committee on Trade -Related 
Investment Measures, certain Members raised questions on several aspects linked to local content 
conditions under the INOVAR -AUTO programme.161 Two dispute settlemen t cases involving 
domestic support to the automotive industry are under way (Sections 2. 5.1, 4.3.4 and 4.3.5).  
                                                
155 In 2011 , Brazil increased the IPI t ax on automotive products (48 tariff lines) to between 30% and 
55%, and almost simultaneously i.e. in 2012, it introduced the INOVAR -Auto regime.  
156 Decree No. 7,819 of 3 October 2012.  
157 The PBEV, a labelling program me only for cars, measures the consumptio n of fuel, gas and Co 2 and 
No2 emissions. These labelling standards are issued by INMETRO in partnership with MDIC. Every year 
INMETRO issues the labelling technical regulation according to the type of the vehicle. INMETRO online 
information. Viewed at: http://www.inmetro.gov.br/consumidor/tabelas_pbe_veicular.asp . 
158 The IPI tax credits are linked to the level of certain expenditures in Brazil, including on so -called 
strategic inp uts (i.e. raw materials and automotive components), tooling ( ferramentaria ), R&D, and 
capacity -building of automotive suppliers. WTO document WT/DS497/1, G/L/1119 G/TRIMS/D/41, 
G/SCM/D108/1, 9 July 2015.  
159 Article 21 of Decree No. 7.819, 3 October 2012.  
160 EIU (2016), Industry Report – Automotive – Brazil – 3rd Quarter , 16 July. Viewed at: 
http://www.eiu.com/FileHandler.ashx?issue_id=1584474142&mode=pdf . 
161 WTO documents G/TRIMS/ M/36, 5 September 2014, and G/TRIMS/M/37, 21 November 2014.  WT/TPR/S/358 • Brazil  
 
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  4.3.6   Other activities  
4.105.   The development of the information technology (IT) industry has been a longstanding 
policy objective in Brazil. According to th e authorities, the IT industry's share of GDP decreased 
slightly from 2.95% in 2013 to 2.62% in 2016, whereas its share in gross value added stood at 
0.4% in 2014; during the same period, employment also declined considerably from 
134,295  to 90,000.162 The t rade deficit in IT items peaked in 2015 (R$31.6 billion) and bottomed 
in 2016 (R$23  billion); in 2015, imports were about eight times higher than exports.  
4.106.   The IT industry benefits from tariffs ranging from zero to 20%. Brazil remains a 
non-participant in the WTO plurilateral Information Technology Agreement (ITA). In addition to 
incentives under PADIS and PATVD (until 2017) (Table A3.2), the Special Regime for the 
Information Technology Exportation Platform (REPES) suspends Social Integration Program (PIS)  
and Contribution to Social Security Financing (COFINS) taxes on goods imported and information 
technology services provided by companies that commit to export software and information 
technology services to the extent that those exports account for more t han 50% of the company's 
annual gross income.163 Since  2005, several IT -specific tax breaks (e.g. PADIS, PATVD 
(until  2017) (Table A3.2)), IPI reduction similar to automotive, and incentives linked to production 
step-related local content (see below) remain in place; they cover many domestically -produced IT 
and digital goods qualifying for status under the Basic Production Process ( Processo Productivo 
Básico , PPB) requiring a certain minimum amount of production step -related local content 
(Sections 3.2.5 and 3.3.1, and below). Companies producing IT and automated goods and services 
that invest in R&D may qualify for tax incentives. During the review period domestic support to the 
activity has been strengthened. Law 13,023 of 2014 extended the IPI reduction lin ked to 
production step -related local content through 2029.164 The existing 80% reduction in IPI seems to 
apply through 2024; it then falls to 75% through  2026 and to 70% through 2029. This benefit 
applies only to companies that make R&D investments equivalen t to 5% of their gross income; 
moreover, at least 46% of such investments must be made jointly with research institutes and 
schools of high academic standards. The law also extended benefits for the Amazon and Northeast 
regions. BNDES has extended its Info rmation Technology and Software Development Programme 
(Programa para o Desenvolvimento da Indústria de Software e Serviços de Tecnologia da 
Informação —Prosoft ) until January 2017; the programme, originally funded with R$5 billion, 
provided administered int erest rate loans to companies that include Brazil in their development 
plans and add value in or export from the country. The same dispute settlement cases involving 
domestic support to the automotive industry cover the IT industry (Sections 2. 5.1, 4.3.4 
and 4.3.5). No information on the amount of total domestic support to the IT industry 
(e.g. foregone tax revenue, budgetary outlays) and an appr aisal on its achievements 
(e.g. investment, output, employment, and exports) were available with the authorities.   
4.107.   In aeronautics Brazil's privately -owned Empresa Brasileira de Aeronautica  (Embraer), 
where the State retains interest through possession of golden shares allowing it veto power, is the 
world's third largest aircraft producer and the global leader in the 70-130 seat aircraft segment, 
where it accounts for 60% of global deliveries. Embraer has always been strongly integrated into 
global production chains, and imports still account for 70% of its value added.165 Aircraft imports 
(HS 8802 and 8803) remain subje ct to zero customs duty. At the same time, exports have grown 
steadily, performing significantly stronger than motor vehicle exports. No data on the aeronautics 
industry contribution to Brazil's GDP, manufacturing value added, employment and exports were 
available with the authorities.  
4.108.   Aeronautics industry -specific tax incentives under the RETAERO scheme (Table A3.2) 
remained in place during the review period.  In 2014 a venture capital fund for the aerospace 
                                                
162 IBGE online information, "Contas Nacionais Trimestrais data". Viewed at: 
ftp://ftp.ibge.gov.br/Contas_Nacionais/Sistema_de_Contas_Nacionais/2014/tabelas_xls/sinoticas/tab13_2.xls  
and http://www.ibge.gov.br/home/estatistica/indicadores/pib/de faultcnt.shtm . 
163 The authorities indicated their disagreement with productive stages and basic production processes 
being considered as elements of local content. USTR (2016), 2 016 National Trade Estimate Report on Foreign 
Trade Barriers . Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -and-
publications/2016/2016 -national -trade -estimate . 
164 EIU (2016), Country Commerce – Brazil , September . 
165 Arnold, J. (2016), Brazil: A tale of two industries or how openness to trade matters , OECD online 
article, 22 March. Viewed at: https://oecdecoscope.wordpress.com/2016/03/22/brazil -a-tale-of-two-industries -
or-how-openness -to-trade-matters/ . WT/TPR/S/358 • Brazil  
 
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  industry the Aerospace Investment Fund in Equitie s (Aeroespacial Fundo de Investimento em 
Participações ), was launched by the state development bank BNDES, the Brazilian Innovation 
Agency ( Financiadora de Estudos e Projetos  (FINEP)), the São Paulo Development Agency 
(Agência de Desenvolvimento Paulista ) and Embraer, with the goal of strengthening the industry's 
supply chain. The fund was to invest under market conditions in three to four start -ups and four to 
six SMEs working on innovations in the aeronautics, aerospace, defence, security and systems 
integration sectors. The fund's initial capitalisation was of R$131.3 million. Embraer, FINEP and 
BNDES have subscribed R$40 million each. By December 2016, five companies received a total 
investment disbursement of R$42 million.166  
4.109.   Other industry -specific supp ort, inter alia , is available for fertilizers and pharmaceuticals. 
The 2013 Special Regime for the Development of the Fertilizer Industry (REIF) which was to 
provide to fertilizer producers tax benefits, including an exemption for the IPI on imported input s, 
provided they comply with minimum production step -related local content requirements and can 
demonstrate investment in local research and development projects, has not come into force since 
its implementing rules and regulation have not been issued yet.167  
4.4  Services  
4.4.1   Main features  
4.110.   The s ervices  sector  continue s to be the main contributor to Brazil's gross value added and 
job creation, but suffer s from structural weaknesses and subpar international performance. The 
sector's  gross value added share rose progre ssively from 69.1% (2012) to 73.3% (2016) 
(Table  1.1); its share in total employment stood at 65.7% in 2014, suggesting a rise in labour 
productivity. According to Brazilian Institute of Geography and Statistics (IBGE) data, labour 
productivity (gross valu e added divided by people employed in the sector) rose by 7.3% from 
R$59,467 of value  added per employee in 2013 to R$64 ,010 in 2014.168 No TFP growth indicators 
were available from the authorities. Public administration, education, public health, and distri butive 
trade ( i.e. wholesale and retail trade, and repair of motor vehicles, motorcycles and personal and 
household goods) remain the leading activities in GDP terms; other important activities are 
financial intermediation and insurance, and transportation , storage, and courier  services . 
According to the OECD, services inputs also account for nearly two fifths of Brazil's manufacturing 
value added and an even larger share in the sectors prioriti zed for industrial development.169 Flows 
of foreign investment ha ve decreased in recent years, even though Brazilian services remain a 
significant destination for foreign investors aiming to serve the local market . The FDI directed to 
services activities dropped from US$31.4 billion in 2012 to US$28.4 billion in 2015 an d 
US$19.3  billion in 2016 (November).170  
4.111.   While not always producing a direct export, the performance of the services sector remains 
a key component of the country's overall export competitiveness. The growth of Brazil's services 
exports has not kept pace wi th other large emerging economies, leading to a widening services 
trade deficit which peaked in 2014 (Table 1.5).171 In 2015 , Brazil was the world's 32nd largest 
exporter and 19th importer of services.172 Trade in services remains a minor component of Brazil's  
foreign trade; in 2016, exports of commercial services represented 15.3% of total exports of 
goods and services whereas imports accounted for 29.3% of total imports of goods and services 
(Table  1.4). According to Siscoserv (Brazilian Integrated System of Foreign Trade in Services and 
                                                
166 Central de Sistemas online information. Viewed at: http://sistemas.cvm.gov.br/?fundosreg . 
167 USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barriers . Viewed at: 
https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -national -trade -
estimate . 
168 IBGE (2013), Pesquisa Anual de Serviços 2013 . Viewed at: 
http://biblioteca.ibge.gov.br/visualizacao/periodicos/150/pas_2013_v15.pdf ; IBGE (2014), Pesquisa Anual de 
Serviços 2014 . Viewed at: http://biblioteca.ibge.g ov.br/visualizacao/periodicos/150/pas_2014_v16.pdf . 
169 OECD (2016), Serv ices and Performance of the Brazilian Economy - Analysis and Policy Options , 
unclassified document TAD/TC/WP(2016)13/FINAL, 8 September 2016.  
170 Central Bank of Brazil (BCB) online dat a. Viewed at: 
http://www.bcb.gov.br/htms/Infecon/SeriehistFluxoInvDir.asp . 
171 OECD (2016), Services and Performance of the Brazilian Economy - Analysis and Policy Options , 
unclassif ied document TAD/TC/WP(2016)13/FINAL, 8 September 2016.  
172 WTO online data. Viewed at: 
http://stat.wto.org/CountryProfile/WSDBCountryPFView.aspx?Language=E&Countr y=BR . WT/TPR/S/358 • Brazil  
 
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  Intangibles) data, in 2015 the major export services were management and management 
consulting services, other professional, technical and management services, services auxiliary to 
financial services, water transport services  of freight and maintenance and repair services of 
fabricated metal products, machinery and equipment , whereas its main imports were operational 
leasing, water transport services of freight, licensing on copyright and related rights, other 
professional, te chnical and management services and financial services except investment 
banking, insurance services and supplementary pension plans.  
4.112.   Low services performance acts as a constraint to the dynamism of the whole Brazilian 
economy.173 In order to bolster indust rial competitiveness, attract foreign investment and 
participate in global value chains, Brazil's economy requires quality services at competitive prices. 
According to the OECD, t he areas with the largest potential for regulatory reform include 
improvement s in the general business and trading environment as well as specific policies in 
transport, telecoms and financial services; the OECD Services Trade Restrictiveness Index (STRI) 
indicates that regulations in these areas tend to be more restrictive towards  foreign services 
providers than in its Latin American peers.174 Transport, logistics and credit suffer from severe 
deficiencies in infrastructure as well as inadequate competitive pressures. Royalties, technical 
assistance and outsourced business services r equire a stable, simplified general policy 
environment to grow. A number of initiatives to boost private entry and improve the functioning of 
core services, many of which are under discussion or have been recently launched, were 
undertaken. The timely impl ementation of pro -competitive reforms and co -ordination between 
public stakeholders will be critical to ensure their effectiveness. Services reforms have strong 
potential to unlock manufacturing performance and productivity ( Section  4.3.1).  
4.4.2   Commitments un der the General Agreement on Trade in Services and RTAs  
4.113.   Brazil's commitments under the GATS were last changed in March 2016 with the 
ratification and insertion of the Fifth Protocol undertakings in the area of  financial services.175 
Brazil's Schedule of Spec ific Commitments contains undertakings in certain business services 
(including professional services), construction services, courier services, distribution services, 
financial services, hotels and restaurants services, as well as rail, road and pipeline t ransport 
services and those auxiliary to all modes of transport.176 It covers less than a third of all services 
subsectors in the Services Sectoral Classification List; measured in such a way, this is less than 
the average sectoral coverage among WTO Members .177 Brazil has not ratified the Fourth Protocol 
on basic telecommunications.178 Its list of Article II (MFN) Exemptions covers measures in relation 
to audiovisual co -production agreements, the supply of land transport services with countries of 
South America,  and bilateral maritime transport agreements on cargo reservation and cargo 
sharing.179  
4.114.   Brazil maintains two RTAs involving commitments on trade in services: MERCOSUR 
(ACE-18) (2005); and, Mercosur -Chile Agreement (ACE 35) (2009) ( Section  2.6.2.1.1). The en try 
into force of a third agreement, the Agreement on Economic and Trade Expansion between Brazil 
                                                
173 For example, the tax burden on services is heavier than in other sectors. While the average tax 
burden on the production and consumption of goods and services was 19.4% in 2013, it was much higher in 
the services segments most critical to other se ctors of the economy; the tax burden exceeded 23% in 
transport and business services, and 27% in IT services. OECD (2016), Services and Performance of the 
Brazilian Economy - Analysis and Policy Options , unclassified document TAD/TC/WP(2016)13/FINAL, 
8 September, Paris.  
174 OECD (2016), Services and Performance of the Brazilian Economy - Analysis and Policy Options , 
unclassified document TAD/TC/WP(2016)13/FINAL, 8 September, Paris.  
175 More information on Brazil's GATS commitments may be found, inter alia, in WTO documents 
GATS/SC/13, 15 April 1994; and, GATS/SC/13/Suppl.3/Rev.1, 27 June 2016.  
176 Sectors in which there are no commitments include computer, telecommunication, audiovisual, 
education, health, environmental, recreational, maritime transport, and air t ransport services.  
177 WTO document MTN.GNS/W/120, 10 July 1991.  
178 During the negotiations of the Fourth Protocol of GATS, certain WTO Members raised reservations 
about Brazil's offer, because it referred to Article 18 of the General Law of Telecommunication s (Law 
No. 9.472/97), which allowed the Executive Branch to review the participation of foreign capital in telecom 
operators established in Brazil. As a result , Brazil withdrew its telecom offer. Nevertheless, in the context of 
the Doha Round, Brazil did i nclude telecommunications services in its revised offer of 2005 
(TN/S/O/BRA/Rev.1).  
179 WTO document GATS/EL/13, 15 April 1994.  WT/TPR/S/358 • Brazil  
 
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  and Peru, concluded in April 2016 and covering trade in services, is pending.180 Brazil has notified 
one MERCOSUR RTA under Article V of the GATS. In MERCOSUR, Brazil undertook specific 
commitments on trade in services that went significantly beyond the commitments under the 
GATS. These commitments covered new sectors (computer, R&D, telecommunication, audiovisual, 
educational, environmental, and maritime transpo rt services) and improved sectoral coverage 
and/or the level of treatment bound in a number of other sectors (professional, distribution, 
financial, and other business services). Under  the Brazil -Peru agreement, Brazil undertook market 
access commitments i n sports event promotion  and organization , and sport facility operation 
services.  
4.115.   As from 4  November  2015, Brazil has  accorded preferential market access treatment to 
services and services suppliers of least developed countries (LDCs) on certain business,  
construction and related engineering, distribution, insurance and insurance -related, travel agenc y 
and tour operator/guide, sporting, auxiliary maritime transport, and freight transportation 
services.181 Preferences are predominantly accorded to the supply of these services through 
commercial presence.  
4.4.3   Financial services  
4.116.   Brazil remains the largest financial services market in Latin America.182 During the review 
period , its financial system (SFN) remained sound amidst the recession and low credit growth. The 
contribution of financial and insurance services to gross value added rose between 2012 and  2016, 
from 6.4% to 8.3%  (Table 1.1); in 2014, the sector employed 1.2% (1.1% in 2012) of the labour 
force, suggesting a rise in labour productivity. The sector's ass ets peaked in 2012 and then 
dropped by 25.4% as of 2015 , followed by a rise of 26.3% in 2016 (Table 4.11). In 2016 , banks 
accounted for 59.4% of the system's assets , whereas insurance companies  accounted  for 1.3% , 
compared to 60.5% and 1.5% in 2012 , respec tively; investment and pension funds held 26.4% 
and 11.1% of the assets . Within services, financial services constitute the largest recipient of 
foreign capital and the sector where most mergers and acquisitions take place.183 According to the 
IMF, there see ms to be scope for making SFN even more robust by enhancing the financial safety 
net as well as ensuring continued vigilance and close monitoring of the health of the corporate 
sector and its links to the banking sector.184  
Table 4.11 Structure of the financial system, 2010 -16 
(US$ billion)  
 2010  2011  2012  2013  2014  2015  2016  
Total financial system assets, of which  4,138.8  4,306.6  4,668.5  4,441.6  4,372.9  3,262.0  4,120.3  
Banks  2,533.7  2,639.9  2,823.8  2,711.6  2,716.6  2,055.1  2,447.4  
Assets of state -owned banks  1,049.2  1,123.2  1,252.1  1,257.5  1,276.8  950.6  1,143.6  
Non-bank financial and credit institutions 
(NBFCIs)  50.2 50.6 54.9 57.4 60.2 46.5 63.8 
Insurance companies  76.5 70.8 73.4 66.2 62.9 43.3 55.7 
Pension funds  466.4  489.1  541.0  486.2  460.7  336.0  456.9  
Investment funds  996.9  1,042.1  1,159.9  1,104.2  1,057.8  771.0  1,086.3  
Other  18.4 17.7 19.4 19.6 18.6 13.2 10.2 
Credits, of which  1,083.3  1,146.8  1,232.7  1,255.7  1,245.6  1,009.1  1,147.6  
Banks  1,056.2  1,118.1  1,200.5  1,221.1  1,209.5  981.3  1,112.1  
State -owned banks  538.6  581.4  665.6  715.0  734.5  558.9  634.6  
NBFCIs  27.1 28.7 32.2 34.6 36.1 27.8 35.5 
Non-performing loans/total loans (%)  3.0 3.2 3.9 3.3 3.0 3.5 3.7 
Non-performing loans/bank loans (%)  3.0 3.1 3.7 3.1 2.9 3.3 3.6 
Non-performing loans/NBFCI loans (%)  3.4 5.0 7.3 5.4 5.0 5.9 5.1 
Loans in foreign currency/total loans (%)  4.5 5.6 5.7 5.2 5.3 6.8 4.8 
Credits/GDP (%)  46.5 49.2 52.3 55.2 57.3 65.7 59.7 
Deposits, of which  882.7  897.0  860.9  803.0  740.9  534.0  652.4  
Banks  863.4  875.4  837.4  778.1  714.6  512.9  622.1  
State -owned banks  388.4  406.3  422.9  399.2  368.0  259.1  323.7  
NBFCIs  19.3 21.6 23.5 24.9 26.3 21.1 30.3 
                                                
180 Ministério da Indústria, Comércio Exterior e Serviços (MDIC) online information. Viewed at: 
http://www.mdic.gov.br/comercio -exterior/negociacoes -internacionais . 
181 WTO document S/C/N/839 , 5 November 2015.  
182 EIU (2016), Industry Report - Financial services – Brazil  – 3rd Quarter , 23 August.  
183 OECD (20 16), Services and Performance of the Brazilian Economy - Analysis and Policy Options , 
unclassified document TAD/TC/WP(2016)13/FINAL, 8 September 2016.  
184 IMF (2016), Brazil - Staff Report for the 2016 Article IV Consultation , Country Report No. 16/348, 
14 October. Viewed at: http://www.imf.org/external/pubs/ft/scr/2016/cr16348.pdf . WT/TPR/S/358 • Brazil  
 
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   2010  2011  2012  2013  2014  2015  2016  
Deposits in foreign currency/total deposits 
(%) 0.0 0.0 0.0 0.0 0.0 0.0 0.0 
Depos its/GDP (%)  37.8 38.5 36.5 35.7 34.6 35.3 33.9 
Interest rate spread (domestic currency) (%)  - 17.8 14.4 13.8 14.9 18.6 22.5 
Source:  Central Bank of Brazil.  
4.117.   The main SFN regulators remain the National Monetary Council (CMN) and the National 
Council of Pr ivate Insurance (CNSP). The CMN sets policies and issues regulations for financial 
institutions in line with recommendations from the Central Bank of Brazil, the Brazilian Securities 
Exchange Commission (CVM), and the Superintendence of Private Insurance ( SUSEP). According 
to OECD, t he regulators , other than CVM , lack operational and management independence; the 
Central Bank does not have independent funding sources, two out of three leading members of the 
CMN are Ministers , and the members of the Board of the Central Bank have no fixed -term 
appointment.185  
4.4.3.1   Banking and finance  
4.118.   The banking system, which consists of 1,616 institutions, remains roughly unchanged and 
relatively concentrated, with the five largest banks (two public: Banco do Brazil, Caixa Econômic a 
Federal ; three private: Bradesco, Itau Unibanco, Santander ) accounting for 72% of the banking 
sector assets and 84% of the deposit base.186 Brazilian legislation considers that every financial 
institution (FI) established in the country is a national FI.  Notwithstanding this feature, Central 
Bank data indicate that  the market share of foreign -owned banks remains low, accounting for 15% 
of total banking assets. As of March 2017 , foreign -owned banks and financial institutions consisted 
of 130 institutions cov ering: 56 multiple banks (56 in 2012), 10 commercial banks (9  in 2012) and 
8 investment banks (6 in 2012), 3 consumer finance companies (CFI, 4 in 2012), 16  security 
brokerage companies (CTVM, 20 in 2012), 2 exchange brokerag e companies (CC,  1 in 2012), 
18 security distribution companies (DTVM, 18 in 2012), 14 leasing  companies (SAM, 14  in 2012), 
1 mortgage compan y (CH, 1 in 2012) and 2 micro -financing institutions (SCM, 1  in 2012).187 
Government -owned banks' share of total bank assets rose from 44.3% in 2012  to 47.32% in 
September 2015 (Table 4.11); these banks receive 51% of deposits and issue 57% of total 
domestic loans, including those directed to agriculture, housing and infrastructure. No 
divestment/privatization action or plans were undertaken during th e review period. The CMN is 
entitled to channel the allocation of resources of private financial institutions towards priority 
regions or sectors.  
Institutional framework  
4.119.   Although the Central Bank has enjoyed administrative autonomy since the mid -1990s it  is 
one of the few remaining major central banks in the world that are not independent under the law; 
legislation  allowing for more autonomy would possibly be considered as from when the economy 
                                                
185 OECD (2016), Services and Performance of the Brazilian Economy - Analysis and Policy Options , 
unclassifi ed document TAD/TC/WP(2016)13/FINAL, 8 September 2016.  
186 The degree of concentration depends on the ind ex used. In parallel with the concentration index 
based on the market share of the four biggest institutions, the classical indicator of concentration ba sed on  the 
Herfindahl –Hirschman Index (HHI), ranks the Brazilian financial system as moderately concentrated. In June 
2016, its HHI ranged from to 1,381 to 1,602, depending on the aggregate basis (total assets, deposits or 
loans) and always under 1,800, th e limit that defines high concentration. These numbers remained basically 
the same over the previous four years. No recent data on the structure of the system were available with the 
authorities. As at September  2016, the system comprised: 133 multiple ban ks (137 in 2012), 21 commercial 
banks (20 in 2012), 4 development banks (4 in 2012), 1 savings banks (1 in 2012), 14 investment banks 
(14 in 2012), 3 exchange banks (2 in 2012), 53 consumer finance companies (CFI, 58), 79 security brokerage 
companies (CTVM , 94 in 2012), 63 exchange brokerage companies (CC, 57 in 2012), 101 security distribution 
companies (DTVM, 118 in 2012), 25 leasing companies (SAM, 30), 4 real estate credit companies and savings 
and loans associations (SCI & APE, 12), 9 mortgage companie s (CH, 7), 16 development agencies 
(16 in 2012), 1.081 credit unions (1,254), and 38 micro -financing institutions (SCM, 40 in 2012). 
OECD  (2016), Services and Performance of the Brazilian Economy - Analysis and Policy Options , unclassified 
document TAD/TC/ WP(2016)13/FINAL, 8 September 2016.  
187 Other than participation in the retail market by Santander, foreign banks are involved in trade 
finance, foreign -exchange operations, recycling of foreign funds and financing of the subsidiaries of 
multinational firms in Brazil. EIU (2016), Industry Report - Financial services – Brazil , 3rd Quarter, 23 August.  WT/TPR/S/358 • Brazil  
 
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  stabilizes in 2018 or 2019 .188 The Central Bank continues to au thorize financial institutions, and 
supervise deposit -taking financial institutions, other financial institutions, financial intermediaries, 
payment institutions, consortium companies and payment schemes.189 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, securities issuers, portfolio managers, broker/dealers, and individuals  
operating in the securities markets. The Central Bank supervises prudential aspects , as well as 
financial conduct and competition issues , and the CVM supervises capital market operations.  
Regulatory framework  
4.120.   During the review period the main legal fram ework for banking remained unchanged.190 
The banking sector and other financial services are regulated at the federal level. The Central 
Bank's Manual of Norms and Instructions  contain ing most banking regulations issued by the CMN 
is no longer in place , as all regulatory amendments and guidelines including licensing requirements 
are now available online.191  
4.121.   Market access conditions in financial activities remain unchanged. Foreign banks are 
allowed to establish only subsidiaries; those directly responsible for  the administration of the 
financial institutions must be Brazilian residents.  Direct branching by foreign banks is not allowed. 
The establishment of new subsidiaries of foreign financial institutions and the increase in 
participation of foreign individual s or legal entities in the equity of national financial institutions 
remain subject to authorization by Presidential Decree that so far has been granted to nearly all 
applications.192 The President of the Republic grants authorization upon CMN recommendation , 
which is contingent upon Central Bank recommendation. Applications by foreign investors must 
specify, inter alia , the amount of foreign participation in total capital, the investor's existing 
activities in the Brazilian financial system, and the benefits  to the Brazilian economy. The 
authorizing Presidential Decree is not required if authorizations are granted under international 
agreements or reciprocity conditions. Representation within Brazil of financial institutions 
headquartered abroad requires prio r authorization by the Central Bank; local representatives must 
be individuals or legal entities domiciled in Brazil. Representative offices are prohibited from taking 
deposits or undertaking any other financial transaction s. Cross -border supply of banking  services 
is not permitted. Consumption of banking services abroad is not regulated.  
Prudential requirements and soundness  
4.122.   Since March 2013 , Brazil has implemented the Basel III framework recommendations on 
banking supervision , which  establish minimum cap ital requirements of 10.5% (8% requirement 
+ 2.5% conservation buffer) similar to the Brazilian requirements (9.25% requirement +1.25% 
conservation buffer in 2017). Rules  regarding  the countercyclical capital buffer (0% requirement of 
risk-weighted assets (RWA))  and additional requirement for systemically important banks have 
already been implemented (0.25% requirement of RWA in 2017) . Implementation of the capital 
framework follows the schedule recommended by Basel III, ending in 2019. Recommendations on 
liquidity and leverage ratios have also been implemented according to the Basel III schedule. A 
                                                
188 According to the authorities , constitutional amendments may be required too. Reuters , "Brazil central 
bank autonomy bill not a priority –source ", 31 January 201 7. Viewed at: http://www.reuters.com/article/brazil -
cenbank -autonomy -idUSL1N1FL1M5 . 
189 The payments institutions and payments schemes have been supervised by the Central Ba nk since 
the enactment of Law 12.865 of 9 October 2013. They operate in the payment intermediation sector, involving 
prepaid cards, electronic money and customer accrediting.  
190 The main legislation includes Article 192 of the Federal Constitution; Article 52 of the Temporary 
Constitutional Provisions Act; Law No. 4,595, 31 December 1964; Law No.  4,728, 14  July 1965; Law 
No. 6,024, 13 March 1974; Law No. 7,492, 16 June 1986 ; Law No. 9,613, 3 March  1998; Supplementary Law 
No. 105, 10 January 2001 ; and Resolut ion No. 3,040/2002.  
191 Central Bank of Brazil online information. Viewed at: http://www.bcb.gov.br/?MANUMCR . 
192 Under Article 192 of the Federal Constitution and Article 52 of the Transitory Provisions, until th e 
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. More information on this matter is available 
in WTO document WT/TPR/S/283/Rev.1, 26 July 2013. OECD (2016), Services and Performance of the 
Brazilian Economy - Analysis and Policy Options , unclassified document TAD/TC/WP(2016)13/FINAL, 
8 September 2016.  WT/TPR/S/358 • Brazil  
 
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  requirement that systemically important banks adopt a recovery plan has already been in place 
since 2016. The 1995 Credit Guarantee Fund (FGC), a private not -for-profit entity, administers a 
compulsory deposit insurance scheme contributing to the SFN's stability. As of June 2016, the 
credit covered by the FGC (R$993 billion) was equivalent to around 55% of total deposits 
(R$1.823 trillion). In May  2013, the indivi dual coverage ceiling was increased from R$70,000 to 
R$250,000 (US$77,000).193 A new resolution framework to include backstop for the deposit 
insurance fund from the Central Bank is to be implemented in 2017. Since September 2013, the 
credit unions have had their own guarantee fund (FGCoop), which follows in general the same 
conditions applicable to the FGC, including individual coverage ceilings.  
4.123.   According to the IMF, the banking system remains largely sound , although the recession 
has affected profitabilit y and asset quality.194 The system -wide capital ratios were raised slightly 
since 2013, remaining well above the regulatory minima  (Table 4.12 ); in December 2016 , all 
except two small institutions exceeded the solvency ratios of 4.5% of common equity capital , 
6.0% of Tier 1 capital and 10.5% of total capital, a comfortable buffer. Profitability rose in 2015 , 
but declined in 2016 owing to a spike in provisions for loan losses and a lower domestic credit 
portfolio. Non -performing loans (NPLs) have gradually inc reased, but remain moderate. Banks 
have remained well provisioned with loan loss reserves covering, according to the authorities, 
178.4% of NPLs as at end -2016, compared to 175.2% in 2013 .195 External funding exposures 
remain low and have gradually decreased  since 2015. A comprehensive and timely stress testing 
framework is in place and being enhanced through a "bottom -up" approach.  
Table 4.12 Banking soundness indicatorsa, 2012 -16 
(%) 
 2012  2013  2014  2015  2016  
Capital adequacy ratio  16.4  16.1  16.7  16.4  17.2  
Tier 1 capital ratio  11.9  12.6  13.0  12.7  13.7  
Return on assets  1.4 1.4 1.3 1.5 1.1 
Non-performing loans to total gross loans  3.4 2.9 2.9 3.3 3.6 
External funding to total funding  9.3 8.5 9.4 13.0  10.3  
a Includes public and private banks.  
Source:  IMF (2016), Brazil - Staff Report for the 2016 Article IV Consultation , Country Report No. 16/348, 
14 October. Viewed at: http://www.imf.org /external/pubs/ft/scr/2016/cr16348.pdf ; and revised 
2016 data provided by the authorities.  
4.124.   High interest spreads between lending rates and the remuneration of deposits remain in 
place; following a decline due to public banks' reduced lending rates, these spreads have been on 
the rise from 2013 onwards , though the authorities indicated that they are now in decline due to 
monetary policy action to reduc e interest rates (Table 4.11, Chart 4.2). The rising trend has been 
attributed to inflationary pressures an d volatility in macroeconomic conditions, but also the 
existing regulatory framework and the lack of competitive pressure on major banks.196 
Furthermore, credit allocation is distorted by the size of BNDES lending and that of other 
state-owned banks; the maj ority of BNDES loans are to large enterprises rather than SMEs.  
4.125.   According to the IMF, the resilience of the banking sector could be bolstered  by, inter alia , 
strengthening the procedures for use of the FCG deposit insurance fund and enhancing the Central 
Bank's emergency liquidity assistance .197 To improve competition in the banking sector, a  2016 
OECD paper suggests measures such as harmonizing the requirements for the establishment of 
foreign financial institutions with those of domestic banks, enhancing th e independence of the 
                                                
193 The FGC is financed by associated financial institutions, which must contribute 0.0125% of the 
balance of the a ccounts guaranteed (current accounts, savings accounts, and term deposits). Credits of up to 
R$ 250,000 (approximately US$77,000) per person per financial institution are eligible for FGC coverage.  
194 IMF (2016), Brazil - Staff Report for the 2016 Article I V Consultation , Country Report No. 16/348, 
14 October. Viewed at: http://www.imf.org/external/pubs/ft/scr/2016/cr16348.pdf . 
195 EIU (2016), Industry Report Financial services – Brazil , 3rd Quarter, 23 August.  
196 The authorities indicated that this assumption has no connection with the Brazilian reality since the 
Brazilian regulation is in line with the best international standards and all foreign financial institutions willing to 
operate within Brazil are already operating in Brazil. OECD (2016), Services and Performance of the Brazilian 
Economy - Analysis and Policy Options , unclassified document TAD/TC/WP(2016)13/FINAL, 8 September.  
197 IMF (2016), Brazil - Staff Report for the 2016 Articl e IV Consultation , Country Report No. 16/348, 
14 October. Viewed at: http://www.imf.org/external/pubs/ft/scr/2016/cr16348.pdf . WT/TPR/S/358 • Brazil  
 
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  Central Bank and continuing the work on developing a unified and easily searchable registry of 
security interests.198 
Chart 4.2 Interest rate spread, January 2008 to December 2016  
0%10%20%30%40%50%60%
Jan-08
July-08
Jan-09
July-09
Jan-10
July-10
Jan-11
July-11
Jan-12
July-12
Jan-13
July-13
Jan-14
July-14
Jan-15
July-15
Jan-16
July-16Lending rate
Deposit rate
Interest spread
Source:     IMF, International Financial Statistics online information.Chart 4.1   Interest rate spread (%), January 2008 to December 2016
 
Source:  IMF, International Financial Statistics online information.  
4.126.   Brazil maintains information -sharing agreements with the financial supervisory authorities 
of 15 countries  and territories : Argentina, the Bahamas, the Cayman Islands, China, Germany, 
Indonesia, Italy, Mexico, Panama, Paraguay, Portugal, South Africa, Spain, Uruguay, and the 
United States. Informal arrangements are in place with the United Kingdom, with whom a formal 
agreement was being negotiated at the time of the previous TPR, as well as with A ustria, Korea 
(Rep. of), and Switzerland; no information on developments in this area were available from the 
authorities.  
Securities199 
4.127.   Brazil's stock exchange, the São Paulo Stock Exchange (BM&FBovespa), remains the 
largest in Latin America and, according to World Federation of Exchanges data, as of 
November  2016 it became the world's 19th largest in terms of domestic market capitali zation.200 
Trading in securities and derivatives in Brazil  takes place in both the BM&FBovespa and the 
publicly  held company Cet ip, which organizes the over -the-counter markets. Between 
December  2012 and July  2016, the number of BM&FBovespa  listed companies fell from 
440 to 428, and the number of Brazilian companies with listed stocks for trading also dropped 
from 364  to 353; the l atter represented a market value of US$734 billion, equivalent to 35% of 
GDP (July  2016), compared to US$1.16 trillion and 50% of GDP in 2012. As at 
end-December  2015, there were 67  securities companies authorized to trade on BM&FBovespa and 
they represent ed a net aggregate income of US$478 million.  
4.128.   The CVM, an independent government entity under the Ministry of Finance, remains in 
charge of regulating and supervising the securities markets in Brazil, with the exception of 
government and private bonds, whi ch are regulated by the Central Bank. Administrators of stock 
exchanges and organized over -the-counter platforms, as well as some market associations , have 
been granted self -regulatory power and are considered auxiliary entities of the CVM.  
                                                
198 OECD (2016), Services and Performance of the Brazilian  Economy - Analysis and Policy Options , 
unclassified document TAD/TC/WP(2016)13/FINAL, 8 September 2016.  
199 The main legislation includes: Law No. 6,385/76 (the Securities Law) and Law No. 6,404/76 (the 
Corporation Law) as amended by Law No. 10,303 of 31 Oc tober 2001 and Law No. 10,411 of 
26 February  2002; and Law No. 11,638 of 28 December 2007. More information on regulatory, institutional 
and procedural matters in this area is available in WTO document WT/TPR/S/283/Rev.1, 26 July 2013.  
200 EIU (2016), Indust ry Report - Financial services – Brazil , 3rd Quarter, 23 August.  WT/TPR/S/358 • Brazil  
 
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  4.129.   No change s hav e been made  to the main laws governing the securities market since 2013.  
Activities and products related to public offering of securities, tender offers, intermediation or 
brokerage as regard s trading involving securities or derivatives, clearing and settl ement of such 
operations, investment funds, and securitization, among others are regulated and subject to 
registration and authorization. A Financial Transaction Tax (IOF) on capital for investment in equity 
and debt securities remains in place to reduce t he volatility, and to correct imbalances in the 
foreign exchange market; it was last revised in April 2016 to add new provisions on financial 
transactions (IOF) triggered on foreign exchange conversions (IOF -FX) and transactions involving 
bonds and securit ies (IOF -Securities).201 Currently, the IOF rates on the investments of 
non-resident investors in the financial and capital markets are all zero.  
4.130.   No distinction is made between  financial institutions on the basis of origin , as institutions 
registered in Bra zil are considered Brazilian. Foreign investors have access to all the investment 
products available to domestic investors, including forward, futures, and options contracts of farm 
products.202 Foreign investors receive national tax treatment in relation to  operations in the 
financial and capital markets.   
4.4.3.2   Insurance  
4.131.   During the review period , the contribution of insurance activities to GDP rose from 
2.92%  (2012) to 3.29% (2015). Despite rapid growth over recent years, Brazil's population 
remains underinsured.203 Between 2012 and 2015 , insurance companies ' assets, in US dollars, 
shrunk by 42.1% (Table 4.11) owing to the real's depreciation . Market concentration in the 
insurance industry , albeit still high, was slightly reduced as a result of mergers and 
incorpora tion/absorption  of firms; in 2015 , the market share of the ten largest companies in the 
industry stood at 68% in terms of direct premiums, as compared to 68.2% in 2012 and 66.1% 
in 2013.204 Bancassurance plays a significant role , particularly in life busines s; many larger banks 
(e.g. Banco Bradesco, Itaú Unibanco and Banco do Brasil ) continue to offer a full range of 
insurance services , whereas large stand -alone insurers (e.g. Porto Seguro, Mapfre (Spain) and Sul 
América ) tend to dominate non -life insurance. Stand -alone insurers such as Porto Seguro and 
Mapfre  have access to Bancassurance distribution channels through corporate 
arrangements/cross -ownership. By the end of 2015, there were 117 insurance companies, 16 local 
reinsurers and 38 admitted reinsurers c ompared to 118, 12 and 29 in 2012 , respectively. In 2015, 
there were 46 foreign -owned companies with a market share of 17.8% (life insurance) and 32.4% 
(non-life insurance).  
Institutional framework  
4.132.   No changes were made  to the institutional framework of th e insurance industry. The 
Federal Government has responsibility for formulating insurance policy, as well as for establishing 
standards and overseeing operations in the national insurance system (SNSP). The National 
Council of Private Insurance (CNSP ) remains the main body responsible for setting policies for the 
private insurance industry, including establishing the characteristics of the various insurance 
contracts, and for the regulation of the national private insurance system. SUSEP, an autonomous 
body under the Ministry of Finance, is in charge of the control and supervision of insurance, 
reinsurance, open private pension funds, and capitalization (investment plans) and brokerage 
operations. SUSEP implements the CNSP policies. SUSEP signed MoUs with th e Federal Insurance 
Office  (FIO) (United States) and Argentina, and an MoU with the International Association of 
Insurance Supervisors  (IAIS) through which it can cooperate and exchange information with all 
other signatories (currently 60 insurance supervi sors). In 2015 , SUSEP was granted provisional 
                                                
201 Decree No. 8,731 of 2 May 2016; Global Tax Alert online information 
(http://www.ey.com/Publication/vwLUAssets/Brazil_revises_tax_on_financial_transactions/$FILE/2016G_0137
9-161Gbl_Brazil%20revises%20tax%20on%20financial%20transactions.pdf ). 
202 Resolution CMN 4 ,373, 29 September 2014.  
203 Premium expenditure in OECD countries is typically 7% -12% of GDP. EIU (2016), Industry Report - 
Financial services – Brazil , 3rd Quarter, 23 August.  
204 Superintendência de Seguros Privados (SUSEP)/Diretoria de Autorizaç ões (DIRAT )/Coordenação -
geral de produtos (CGPRO)/Coordenação de Estudos, Projetos e Estatística (COEST) (2014), 2º Relatório de 
Análise e Acompanhamento dos Mercados Supervisionados , 28 November 2014, Rio de Janeiro. Viewed at: 
http://www2.susep.gov.br/menuestatistica/SES/principal.aspx ; and EIU (2016), Industry Report - Financial 
services – Brazil , 3rd Quarter, 23 August.  WT/TPR/S/358 • Brazil  
 
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  equivalence to Solvency II (article 227) by the European Insurance and Occupational Pensions 
Authority (EIOPA), a step towards full equivalence.205  
Regulatory framework  
4.133.   During the review period , the legal framew ork for insurance remained largely 
unchanged.206 CNSP Resolutions and SUSEP Circulars regulate the industry's operational activities. 
Insurance companies are precluded by law from engaging in other financial activities; 
nevertheless, they may provide more th an one type of insurance service and may hence be 
composite (life and non -life). Between 2013 and 2015 , the main regulatory changes involved the 
regulation of remote sales of insurance, open private pension products, micro -insurance, travel 
insurance, whol e life insurance, formalization of reinsurance and retrocession contracts, Enterprise 
Risk Management (ERM) and revision of investment norms (CMN Resolution No. 4444/2015). 
Since  1984 (when Bradesco bought  Atlântica -Boavista seguros ), Bancassurance has bee n the main 
distribution channel of insurance in Brazil. The only exceptions apply to: health insurance 
companies, which must be specialized; life insurance companies, which may deal in open pension 
funds; and reinsurance companies. Insurance policies issue d by insurers belonging to the same 
economic group , such as banks , are commonly sold inside bank branches as part of the services 
mix offered therein.  
4.134.   All insurance, local reinsurance (see below), capitalization/investment , and private pension 
fund compan ies remain subject to a supervisory fee ( Taxa de Fiscalização dos Mercados de Seguro 
e Resseguro, de Capitalização e de Previdência Complementar Aberta ); the fee increases in line 
with the margin of solvency whereas for admitted reinsurers there is a singl e fee per supplier.207 
Insurance companies must pay a (higher) fee for the head office and for each risk location.  
4.135.   Insurance brokers must register with SUSEP after passing a technical exam. New insurance 
products do not require SUSEP's prior approval but the y should be submitted for analysis and filing 
prior to their marketing. Life insurance products that offer survivor coverage and annuities , as well 
as capitalization plans and open pension products , require prior approval from SUSEP. SUSEP may 
suspend any product that is found not to comply with the industry's regulatory framework or 
specific provisions thereof, including technical flaws.  Between 2013 and 2015 , there were 
11,898  products submitted to SUSEP of which 471 were suspended.  
4.136.   Market access conditio ns remain unchanged , except for improvements in reinsurance (see 
below). Establishment of a foreign life or non -life insurance company requires prior approval from 
SUSEP , whose authorization ensures the granting of national treatment to the foreign company  
concerned; between 2013 and 2015 , there were 12 approvals and 1 rejection. Foreign insurance 
companies providing insurance of any kind, except reinsurance, are required to be incorporated 
under Brazilian law, in the form of a corporation.208 Direct branchin g by foreign insurance 
companies is not allowed.  
                                                
205 The EU's prudential regulatory regime sets out rules to develop a si ngle market for the insurance 
sector. After receiving equivalence, EU insurers can use local rules to report on their operations in third 
countries, while third country insurers are able to operate in the EU without complying with all EU rules. These 
equiv alence decisions take the form of delegated acts and they concern Switzerland, Australia, Bermuda, 
Brazil, Canada, Mexico and the United States. They provide more legal certainty for EU insurers operating in a 
third country as well as for third country ins urance companies operating in the EU. European Commission 
online information. Viewed at: http://europa.eu/rapid/press -release_IP -15-5126_en.htm . 
206 The main legislation includes Decree L aw 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 February 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.  
207 The calculation of the margin of solvency varies in accordance with the type of insurance provided:  
for private pension funds or investment funds, the fee is 8% of all technical provisions and funds related to 
their activity; fo r life insurance with capitalization, the fee is 8% of all technical provisions and funds related to 
their activity plus the higher of 20% of the net premiums of the last 12 months or 33% of the annual average 
net claims in the past 36 months; for other ty pes of insurance to persons or covering damages, the fee is the 
higher of 20% of the net premiums of the last 12 months or 33% of the annual average net claims in the past 
36 months. Annex I to Law No. 12,249 contains the table of fees.  
208 WTO document GATS /SC/13/Suppl.3, 26 February 1998.  WT/TPR/S/358 • Brazil  
 
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  4.137.   Minimum capital requirements vary according to the region of operation, the company's 
internal risk -management model, and the type of activity.209 There are no barriers to the domestic 
trade of insurance serv ices as long as a company complies with these minimum capital 
requirements.  
4.138.   The contracting of insurance abroad by resident natural persons or legal persons 
established  in Brazil is allowed to: cover risks for which there is no provision of insurance in B razil, 
provided that this represents no violation of existing legislation; cover risks abroad where the 
insured is a resident natural person in Brazil, for which the term of the insurance contract is 
limited exclusively to the period in which the insured p erson is abroad; and, insurance policies that 
are the subject of international agreements ratified by Brazil. The law allows Brazilian legal 
persons to contract insurance abroad to cover risks abroad upon notification to SUSEP.  
Reinsurance  
4.139.   Brazil accounts for more than 40% of Latin America's reinsurance market, and the volume 
of business written in Brazil is expected to grow as the Government invests in energy projects and 
infrastructure upgrades.210 As at December 2015, 1 61 reinsurance companies were authori zed to 
do business in Brazil, of which 16 were local and 145 foreign -owned (38 registered as admitted 
and 97 as occasional (see below)), compared to 102 in late 2012. Until 2007, IRB -Brasil 
Resseguros was the sole provider of reinsurance in Brazil and it remains the top reinsurer 
operating in Brazil with a share of 39.9% of reinsurance premiums ceded by insurers in 2015 . 
4.140.   Since 2007, the reinsurance business has been open to private reinsurance companies, 
including foreign -owned and foreign -based  companies .211 Reinsurance and retrocession may be 
held with: a local reinsurer (established as a corporation under Brazilian law and headquartered in 
Brazil, with the sole object of conducting operations of reinsurance and retrocession); an admitted 
reinsurer (based ab road, with a representative office in Brazil, registered at SUSEP to carry out 
reinsurance and retrocession); or an occasional reinsurer (foreign reinsurance company based 
abroad without a representative office in Brazil, also registered as such at SUSEP).212  
4.141.   A significant relaxation of reinsurance requirements on foreign companies relating to the 
mandatory cession level to local reinsurers took place in July  2015.213 Under the new rules, the 
preferential offer to local reinsurers remains at 40% of each cessio n, but the mandatory minimal 
cession rates are being gradually decreased to 30% in 2017, 25% in 2018, 20% in 2019, and 15% 
in 2020. On the other hand, the cap on intra -group cession for companies affiliated or belonging to 
the same financial conglomerate h eadquartered abroad provided that they are admitted or 
occasional reinsurers, currently at 20% of each cession, is being raised annually to  30% in 2017, 
45% in 2018, 60% in 2019, and 75% in 2020.  
4.4.4   Telecommunications  
4.142.   Telecommunications market growth slowed during the review period; information services 
(including telecoms, computer, and broadcasting services) accounted for 3.1% of gross value 
added in 2016 compared with 3.6% in 2012 (Table 1.1). Fixed -line penetration has fallen steadily 
from 20.1 per 100 pe ople in 2007 to 14.9 per 100 in 2015; this has occurred on the back of 
cheaper mobile -phone technology and services, a particular driver of telephony penetration among 
                                                
209 In accordance with CNSP Resolution No 321/2015, insurance companies must maintain as a capital 
base not less than R$1.2 million in fixed capital plus a variable amount of up to R$13.8 million according to the 
geographic area of operation. They must maintain a capital 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.  Insurance companies, capitalization companies and open 
pension funds must maintain at all times  the highest amount among the capital base and the required risk -
based capital. The required risk -based capital is established by CNSP Resolutions 321/2015.  
210 EIU (2016), Industry Report - Financial services – Brazil , 3rd Quarter, 23 August.  
211 Supplementary Law No. 126 of 15  January 2007.  
212 Retrocession is the cession of reinsurance by reinsurers.  
213 A cession is the portion of insurance transferred to a reinsurer  by the ceding company. CNSP 
Resolution No. 322 of 20 July 2015. USTR (2016), 2016 National Trade Estimate Report on Foreign Trade 
Barriers . Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -
national -trade -estimate . WT/TPR/S/358 • Brazil  
 
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  low-income users.214 Brazil is the world's fourth -largest mobile telephony market on a sub scription 
basis (behind China, the United States and India). As elsewhere in Latin America, the introduction 
of pre -paid cards has been a major spur to deeper mobile -phone penetration; nevertheless, the 
share of pre -paid subscriptions has fallen from above  80% in 2004 -12 to 70% in July 2016, a 
figure that is still high compared with the United  States and western European markets, but is 
similar to levels in Eastern Europe and Africa. Nevertheless, in 2015 – for the first time since the 
establishment of the service – the number of mobile telephony users registered a 8.2% decline , 
from 280.7 million in 2014 to 257.8  million. This was partly the result of the decrease in the value 
of interconnection between fixed and mobile networks (VC) and the mobile telephon y network 
usage fee (VU -M), thus enabling operators to introduce new service offers with reduced tariffs for 
calls between networks (off -net), meaning that users did not need to subscribe to multiple mobile 
phone services.215 During the review period , the nu mber of fixed broadband service users 
continued to increase, including in 2015 when the users of other information services – i.e. fixed 
telephony, mobile telephony and pay -tv – decreased; at the end of 2015, there were 25.5 million 
users.  
4.143.   During the revi ew period , the telecommunications market remained fully open to 
competition , though dominated by a handful of large operators from abroad, including Telefónica 
(Spain), Telecom Italia (Italy) and Teléfonos de México (Telmex)/América Móvil (Mexico), as well  
as a domestic company, Oi, in which  the State maintains a strategic stake through BNDES and the 
pension funds of state -owned enterprises.216 Concentration in the mobile and broadband services 
segments has risen. Following a May 2015 regulatory approval that  established  certain conditions, 
a US$10  billion takeover of Global Village Telecom (GVT), the Brazilian broadband business of 
Vivendi (France), gave Telefónica control of one of the country's fastest -growing operators and 
lead to the creation of the large st telecoms operator in Latin America.217 As at 2015 , the fixed -line 
market, consisting of 65 operators (32 in 2012), was dominated by Telefónica (34.26%), Oi 
(formerly Telemar) (34.21%) , and Embratel (owned by Telmex, 26.61%); Telefonica's share rose 
by 12. 24 percentage points after the GVT takeover.218 As at 2015 , the mobile telephony market, 
consisting of 20 operators (18 in 2012), continued to be dominated by Vivo (28.42%), Tim 
(25.69%), Claro (25.59%) and Oi (18.65%).219 Between 2014 and 2015 , the number of 
companies authorized to supply fixed broadband service grew by 19.5%, and, following the 
acquisition of GVT, Telefónica's market share rose by 11.5 percentage points; as at 2015, the 
market consisting of 3,223 operators (1,725 in 2012), was dominated by Cl aro (31.84%), 
Oi (25.02%), and Telefonica (including GVT) (28.63%).220  
Policy and institutions  
4.144.   The sector's 2015 -2024 Strategic Plan is aimed at: expanding access to and use of 
services of an adequate quality and at affordable prices; stimulating competitio n and 
sustainability; supporting consumer satisfaction; and, promoting the dissemination of sectoral data 
and information.221 Its Operational Plan 2015 -2016 prioritized action through 29 strategic projects 
                                                
214 EIU (2016), Industry Report – Telecommunications – Brazil  – 3rd Quarter , 26 September.  
215 Agência Nacional de Teleco municações - ANATEL (2016), Relatório Anual 2015 , Brasilia. Viewed at: 
http://w ww.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublicacao=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf . 
216 Among large operators from abroad,  Telefonica is the only 100% foreign -owned company, whereas 
for all other companies local participation in ownership is the minority.  
217 The telecommunications regulator (ANATEL, see below) imposed certain conditions on the deal, 
including the ceding of certain fixed licenses, maintenance of geographical coverage of fix ed-line, 
fixed-broadband and pay - TV networks, and commitment to ensuring a minimum broadband speed. 
EIU (2016), Industry Report – Telecommunications – Brazil  – 3rd Quarter , 26 September.  
218 Agência Nacional de Telecomunicações - ANATEL (2016), Relatório An ual 2015 . Viewed at: 
http://www.anatel.gov.br/Portal/verificaDocumentos/documen to.asp?numeroPublicacao=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf . 
219 Claro's shareholders are Embratel, Claro, Star One and Net. Agência Nacional de Telecomunicações - 
ANATEL (2016), Relatório Anual 2015 . Viewed at: 
http://www.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublicaca o=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf . 
220 Agência Nacional de Telecomunicações - ANATEL (2016), Relatório Anual 2015 . Viewed at: 
http://www.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublicacao=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf . 
221 Agência Nacional de Telecomunicações - ANATEL (2016), Relatório Anual 2015 . Viewed at: 
http://www.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublicacao=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf . WT/TPR/S/358 • Brazil  
 
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  grouped in to seven program mes involving: advanced in spection; simplification of the concession 
granting and licensing procedures; economic regulation in converging networks; management of 
consumer relations; regulatory developments by 2025; institutional strengthening; and, regulatory 
intelligence and indus try data.  
4.145.   The Ministry of Science, Technology, Innovation and Communication, through the 
Secretariat of Telecommunications, remains the federal body responsible for policy formulation and 
planning for the sector as well as for radio and TV broadcasting.222 The National 
Telecommunications Agency (ANATEL), the sector's administratively independent and financially 
autonomous regulator, is responsible for policy implementation, licence regulation, overseeing 
incumbents' operations, managing the electromagnetic s pectrum, certifying telecommunications 
equipment, and protecting consumers' rights. It also has the legal authority to review and control 
retail prices of fixed telephony services under the public service regime as well as to approve 
mergers in the sector from a regulatory perspective , whereas competition issues per se  are 
analysed by CADE (the competition authority) ( Section  3.3.4.1 and below).  
Regulatory and operational framework223 
4.146.   No major changes (see below) were made to the main legislation governing t he sector, 
e.g. the General Telecommunications Law (LGT), a unified regulatory framework for pay -tv 
services regardless of the technology used, and the General Plan for Updating Telecommunications 
Regulations.224 The legislation allows telecommunication oper ators more flexibility to offer 
converged services e.g. triple -play offerings (voice, broadband, and television) and quadruple -play 
multi-service packs ( also including  mobile telephony), thus leading to further consolidation of 
Brazil's major telecom group s. Under the LGT, telecom services remain divided into two regimes: 
the public service regime, which covers the incumbent operators of fixed telephony; and the 
private service regime, encompassing all other telecommunications services. In order to provide 
telecommunication services, a concession (public service regime) or authorization (private service 
regime) must be obtained from ANATEL. Concessions are subject to more stringent conditions than 
authorizations (e.g. universal service obligations, accountab ility, and tariff controls); they are 
granted for 20 years, and may be extended once for the same period (last renewed in 
January  2006). Authorizations do not have a time  limit, but permits for the use of radio frequency 
by authorization  holders are limite d 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. Value -added services are not deemed telecommunication services and therefore do not 
requir e an authorization. However, the provision of value -added services must be coupled with a 
telecommunication service regulated by ANATEL; the authorities indicated that it is possible to 
have independent suppliers as long as they create content (e.g. Netfli x). The legislation makes no 
distinction between foreign and domestic capital, and there are no restrictions on foreign 
participation in the telecom companies (except in radio and TV broadcasting, which are not 
covered by the LGT).   
4.147.   New infrastructure legi slation, the "Antenna Law", was signed into law in April 2015 but 
has not yet been  fully implemented; the law , inter alia , seeks to exempt telecommunication 
operators from compensation from the right of way on public roads  and other public property of 
comm on use, to encourage facilities sharing and to standardize/streamline the licensing 
procedures for the implantation of telecommunications infrastructure.225 As of late 2016, the 
Federal Government was considering reforms to the telecoms legislation, which wa s designed for 
the privati zation period and is thought to have held the industry back from further expansion.226 
                                                
222 The Ministry of Communications was merged with the Ministry of Science, Techno logy, Innovation 
and Communication in 2016.  
223 More information on the issues discussed in this section is available in WTO document 
WT/TPR/S/283/Rev.1, 26 July 2013.  
224 Law No. 9,472 of  16 July 1997, Law No. 12,485 of 12 September 2011; and ANATEL Resolutio n 
No. 516 of 30 October 2008.  
225 Law No. 13,116, 20 April 2015; EIU (2016), Industry Report – Telecommunications – Brazil , 3rd 
Quarter, 26 September.  
226 Brazil's telecommunication sector was privatized in 1998 and further liberalized in the early 2000s. 
Overbearing regulatory requirements related to a pre -mobile -phone market impose high costs and could 
benefit from  an overhaul. There are also a high number of performance targets monitored by the regulators 
with large fines for non -compliance, but there is suf ficient competition now for market forces to drive quality of 
mobile telephony. EIU (2016), Industry Report – Telecommunications – Brazil – 3rd Quarter , 26 September.  WT/TPR/S/358 • Brazil  
 
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  Legislation  that would allow ANATEL to convert landline concessions into authorizations and 
transfer leased assets to carriers was being discusse d at the Senate and the Supreme Court in 
January 2017, and was to be introduced in the course of the year; in practice, it could help the 
sector by removing requirements for costly investments in areas where demand is waning, like 
public phones, and reloca ting them elsewhere, e.g. to broadband access.227  
Interconnection  
4.148.   Network interconnection under non -discriminatory conditions and at reasonable rates is 
mandatory for the provision of public telecommunication services.228 Cross -subsidi zation, 
discriminatory discounts, abusive behaviour, and other anti -competitive practices are prohibited.229 
ANATEL sets the interconnection prices for telecom services under the public service regime, while 
interconnection tariffs for services under the private service regime are  negotiated freely, but 
subject to control by ANATEL. Interconnection prices of public service entities (operating under a 
public concession rather than state -owned) must be based on costs and calculated through 
cost-based methodologies. ANATEL is empowere d to apply a cap to interconnection prices charged 
by all operators deemed to have significant market power; no such cap has been  set so far.230 
Domestic support  
4.149.   The 2010 National Broadband Plan (PNBL), which was aimed at boosting access to 
broadband service s across the country and bridging the digital divide, operated from 12  July 2011 
to 31 December 2016; it was to reach 5,385 municipalities by 31 December 2014, and offer 
attractive prices targeted at the most deprived regions. It has been operated under th e June 2011 
terms of commitments signed between the then Ministry of Communications, ANATEL and the 
companies Oi, Vivo, CTBC and Sercomtel under which they were supposed to ensure minimum 
speeds of 1  mbps, at a cost of up to R$35 (US$15) per month; by the end of 2015, 
5,400  municipalities out of 5,570 were provided with 5,399 retail and 4,161 wholesale internet 
package offers.231  
4.150.   As of May 2016 , the Bra zil Smart Program me (Programa Brasil Inteligente ) was introduced 
with the following objectives: expand the fibre optic transport networks; increase the coverage of 
fibre-based access networks in urban areas; expand the mobile broadband coverage of rural 
villages and agglomerates; provide public entities with high -speed internet access, with priority for 
educati on and health services; increase interconnection with international telecommunications 
networks; promote the implementation of smart cities; promote research, development and 
innovation in fifth generation mobile technologies; foster the development and ad option of national 
solutions for the Internet of Things (IoT) and machine -to-machine communication systems; 
promote training and professional qualification s in information and communication technologies; 
provide broadband satellite capability for civil and  military purposes; and expand fibre optic 
transport networks in Amazonia through sub -fluvial cables.232 
4.151.   To achieve its policy objectives, the Government uses its 2012 Geostationary Satellite 
Defence and Strategic Communications ( Satélite Geoestacionário de Defesa e Comunicações 
Estratégicas  (SGDC)) project which implemented  via Visiona Tecnologia Espacial , a joint venture 
                                                
227 Valor International online information, "Telecommunications reform heads to Senate", 
28 November  2016. Viewed at: http://www.valor.com.br/international/news/4790153/telecommunications -
reform -heads -
senate?utm_source=newsletter_international&utm_term=telecommunications+reform+heads+senate&utm_m
edium=29112016&utm_campaign=informativo . 
228 Law No. 9,472 (Articles 146,  147 and 152).  
229 General Regulation on Interconnection, annexed to ANATEL Resolution No. 410 of 11 July 2005.  
230 Criteria for defining "significant market power" are established in ANATEL Resolution No. 438 of 
10 July 2006, and No. 458 of 8 February 2007.  
231 However, it seems that data on user numbers is scarce, largely because many operators chose not to 
enter the uneconomic scheme; a report presented to the Brazilian Senate's Science and Technology Committee 
in December 2014 concluded that the PNBL was fall ing short of its goals. Agência Nacional de 
Telecomunicações - ANATEL (2016), Relatório Anual 2015 , Brasilia. Viewed at: 
http://www.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublicacao=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf ; EIU (2016), Industry Report – 
Telecommunications – Brazil  – 3rd Quarter , 26 September.  
232 Decree No. 8.776 of 11 May 2016.  WT/TPR/S/358 • Brazil  
 
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  between Embraer (51%) and Telebras (49%).233 The launch of the satellite was scheduled for 
21 March 2017 and it was to  become operational in the second half of the same year. 
Furthermore, an Internet of Things (IoT) Chamber (or M2M Chamber), composed of government, 
university and private sector associations stakeholders, was set up in 2014 to monitor, encourage 
and promote the entire ecosystem  of IoT in Brazil; a National IoT Plan containing general 
guidelines, specific actions and goals is to be launched , and a public consultation for its 
subsidization was concluded on 16  January 2017.  
4.152.   Under the  2012 National Broadband Program me Special Taxati on Regime (REPNBL) , 
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 
and imported equipment acquired in the domest ic market, including building materials, and for 
contracting deployment of networks that utilize locally developed products and investments.234 Tax 
exemption upon inspection of the network implementations. The REPNBL, which was terminated 
on 31 December 2016 , resulted in total foregone tax revenue estimated at R$750 million (about 
US$232 million) . Furthermore, tax exemptions and reductions under the Law of Digital Inclusion 
(11,196 of 21 November 2005) for smartphones, machine -to-machine communications, netwo rks 
using the 450  MHz spectrum, and satellite stations were in force until 2015.235 As at late 
September 2016 , internet service providers (ISPs), which provide unlimited fixed broadband 
services to subscribers, were gearing up to place data caps on these fix ed broadband services 
thereby limiting the amount of Internet data that can be used monthly; ANATEL was unlikely to 
challenge broadband operators on the issue of implementing the changes but discussions were still 
ongoing as of March 2017.236  
4.153.   During the rev iew period , local content requirements , in addition to those under the 
REPNBL incentives , were applied to the  auctioning of radio spectrum frequencies in 2014 and, to a 
seemingly lesser extent, in 2015; the authorities indicated that local suppliers had di fficulty in 
meeting these requirements and it is unlikely that they would be used in the future.237 ANATEL 
extended the local content requirements used in a 2012 auction to a 2014 auction for the 700 MHz 
frequency spectrum. Under these requirements , wireless  carriers were required to ensure that 
50% of the infrastructure, including software, installed to supply the licensed service met the 
requirements of the PPB ( Sections  4.3.4 and 4.3.6); they were also required  to use a minimum 
percentage of technology dev eloped in Brazil. In November 2015, ANATEL's auction for the 1.8, 
1.9, and 2.5  GHz spectrum was aimed at increasing competition and attracting smaller carriers, 
and did not contain specific ex-ante local content requirements; however, in the case of equiva lent 
bids, the auction rules provided for a preference for a bid utilizing services, equipment, or 
materials produced in Brazil, including those with national technology.  
4.154.   As from 2013, government agencies have been required to procure e -mail, file sharing , 
teleconferencing and voice-over-Internet -protocol (VoIP) services from SERPRO, Brazil's Federal 
Data Processing Agency.238 In May 2014, the Ministry of Planning, Budget and Logistics issued 
implementing regulations (Portarias 141 and 54) that may require a ccess to source code for 
hardware and software used in the Federal Government's e -mail, file -sharing, teleconferencing, 
and VoIP solutions.  
                                                
233 The SGDC will integrate the national network of Telebras and will enable the service of rural and 
remote areas, which, for technical and economic reasons, cannot be reached by terres trial broadband 
networks. The X band will be used for strategic defence communications and the Ka band for commercial 
broadband provision. The operation of the SGDC will cover the entire national territory with a data 
transmission capacity of 56 Gbps. Decr ee No. 7,769 of 28 June 2012.  
234 Law No. 12,715 of 17 September 2012; USTR (2016), 2016 National Trade Estimate Report on 
Foreign Trade Barriers . Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -and-
publications/2016/2016 -national -trade -estimate . 
235 Provisional Measure 669, 26 February 2015.  
236 EIU (2016), Industry Report – Telecommunications – Brazil  – 3rd Quarter, 26 September.  
237 ANATEL's June 2012 terms of auction for the 2.5 GHz and 450 MHz radio spectrum involving the 
possibility of implementing local content requirements were discussed at the May and October 2012 meetings 
of the WTO Committee on Trade -Related Investment Measures (TRIMS); Brazil provided written replies to 
questions on the local -content provisions in the auction bid. USTR (2016), 2016 National Trade Estimate Report 
on Foreign Trade Barriers . Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -and-
publications/2016/2016 -national -trade -estimate . 
238 Decree No. 8,135/2013; USTR (2016), 2016 National  Trade Estimate Report on Foreign Trade 
Barriers . Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -
national -trade -estimate . WT/TPR/S/358 • Brazil  
 
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  Number portability  
4.155.   Number portability has been requir ed since 2007.239 A private association, contracted 
through publ ic bidding, manages the central reference databank for number portability. As a result 
of the bidding process, the management of portability operations to ABR Telecom, was delegated 
by ANATEL to the Brazilian Telecommunication Resources Association, which also supervises 
infrastructure wholesale in the country and has representatives of the largest telephone operators 
on its board. Number migration is subject to conditions set by ANATEL and ABR Telecom, including 
a fee of R$4.240 Around 350,000 fixed -line and  mobile phone subscribers in Brazil carry their 
number to a new operator each month. Between 2008 and January 2017 , 42,680,517 lines 
including fixed and mobile phones were carried to a different operator.  
Tariffs  
4.156.   Under the LGT, ANATEL reviews and controls  the retail prices of fixed telephony services 
rendered by the companies operating under the public service regime (see above). It sets 
maximum rates for the basic service plan, although concessionaries may still offer alternative 
plans on a non -discrimina tory basis. Prices for local, and national and international long -distance 
calls are subject to specific regulations. No retail price caps for mobile telephony or for fixed 
telephony provided under the private service regime are in place; caps are only fix ed under  the 
public service regime ( i.e. public concession). Cross -subsidization between different services or 
user markets is prohibited. Telecom operators under the private service regime are free to set 
retail prices for their services. The cost of whol esale (carrier -to-carrier) leased lines up to certain 
capacities is also regulated by ANATEL as well as certain interconnection charges.  
4.157.   Strong market competition continued to lead to further improvements in the quality of 
service and to reductions in tar iffs. According to the International Telecommunications Union's ICT 
Price Basket (IPB) index, in 2014 Brazil's average prices for telecom services (fixed -telephony, 
mobile cellular telephony, and fixed broadband services) represented 1.8% of GNI per capita  
(4.8% in 2010)  and Brazil ranked 67th out of 170 countries.241 Between December 2013 and 
January 2015 , the average price per minute for calls from fixed -line to fixed -line rose by 8.4% 
(from R$0.08375  to R$ 0.09082),  partly reflecting inflationary pressures;  on the other hand, in 
February 2015, the rates on local and long -distance calls made from fixed to mobile phones were 
reduced as a result of the lowering of the benchmark for network remuneration rates (ANATEL Act 
1,082/2015).242 In 2015 , ANATEL authorized fixed telephony tariff adjustments of 3.684% (Oi 
(Telemar and Brasil Telecom), Sercomtel, Telefônica), 4.546% (Algar Telecom (CTBC Telecom)) 
and 6.279% (Embratel).243 It is estimated that the average price per minute of mobile phone calls 
fell by 26.3% (from  R$0.19 to R$0.14) from the first quarter of 2012 to the third quarter of 2015. 
Between 2012 and 2015 , the average monthly broadband prices also dro pped by 44% (from 
R$10.74 to R$ 5.98).  
Competition -related issues  
4.158.   ANATEL is responsible for approving merger s in the telecommunications sector from a 
regulatory perspective. The General Plan of Competition Goals addresses the asymmetric 
obligations placed on groups deemed to have significant market power (SMP) in identified relevant 
markets . In 2015, it  was chan ged to avoid the interval between the end of asymmetries in the 
payment scheme of mobile network use values (RVU -M) on 24 February 2016 and the entry in to 
force of the reference values, initially calculated on a top-down  model and converging to a long 
run incremental model as from 2019.244 During 2015 , ANATEL dealt with 91  proceedings involving 
                                                
239 ANATEL Resolution No. 460 of 3 March 2007.  
240 TechinBrazil online information. Viewed at: http://techinbrazil.com/telephone -numbe r-portability -in-
brazil . 
241 International Telecommunication Union (2015), Measuring the Information Society Report - 2015. 
Viewed at : http://www.itu.int/e n/ITU -D/Statistics/Documents/publications/misr2015/MISR2015 -w5.pdf . 
242 Agência Nacional de Telecomunicações - ANATEL (2016), Relatório Anual 2015 . Viewed at: 
http://www.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublicacao=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf . 
243 Agência Nac ional de Telecomunicações - ANATEL (2016), Relatório Anual 2015 . Viewed at: 
http://www.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublicacao=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf . 
244 ANATEL Resolution No. 649/2015.  WT/TPR/S/358 • Brazil  
 
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  interconnection (improper retention, technical, and fraud matters) and Industrial Exploitation of 
Dedicated Line (EILD).  
Universal service obligations  
4.159.   Universal servi ce obligations (USO) continue to apply to telecommunication operators 
under the public service regime ( i.e. the incumbents of local fixed telephony services), which must 
meet the goals established  by the legislation.245 The R$2.1 billion Universal Service Pl an (PGMU) 
for 2011 -15, inter alia , provided for the installation of public telephones in all rural schools and 
rural health posts across Brazil; its funding is undertaken directly by fixed -line operators under the 
public service regime.246 Following the comp letion of the PGMU, in March 2017 there were 
discussion s at the National Congress on chang ing the USO terms from fixed -line coverage to 
broadband penetration. The Universal Telecommunications Service Fund (FUST), managed by 
ANATEL , continues to be funded , inter alia , by the federal budget and by compulsory contributions 
from all telecom operators (i.e. both public and private service suppliers) equal to 1% of their 
gross operating income; in addition, broadcasters contribute on a different basis, i.e. the F ISTEL 
tax levied for installing an antenna. In 2015 , the federal budget and compulsory contributions from 
all telecom operators accounted for 60.6% and 38.2% of the year's FUST funding, respectively. In 
2015, FUST funds totalled R$1.8 billion, 1.5% more th an in 2014 . Since its inception, the Fund has 
raised R$19.5 billion.247 So far the revenue collected through FUST and FISTEL has been retained 
by the National Treasury and never been used in USO -related activities. To date, isolated and 
remote areas have bee n reached only through the implementation of PGMU obligations established  
under the five fixed -line operators' public service regime concessions which contain their 
investment targets in these areas.  
Audiovisual and broadcasting services  
4.160.   Brazil remains Lat in America's largest media market with major growth potential, and the 
only Portuguese -speaking country on the continent; in 2015, it boasted a US$48.4 billion media 
and entertainment industry (M&E), twice as large as Mexico's.248 Brazil has thousands of rad io 
stations and hundreds of TV channels, both very influential media with highly concentrated 
ownership that are tightly regulated by the Government. More than 30% of Brazilian households 
subscribe to pay -tv where Globo , Brazil 's cable giant and the larges t in Latin America, has a 
viewership of almost half of the country 's population . It provides pay -tv channels, magazines, 
radio, film production and newspapers, although the bulk of its US$6.3 billion (2013) fortune 
comes from its broadcast network which ai rs telenovelas (soap operas) that are popular 
throughout the continent. The digital TV transition scheduled to switch off analogue in 2016 was 
held off until 2018 in 1,326 cities, where the analogue shutdown is mandatory for the operation of 
fourth generat ion mobile services in the 700MHz band , whereas the remaining 4,244 cities will 
have their analogue shutdown processes completed by 2023.  
4.161.   Investment barriers seem to make market entry a challenge.249 Foreign ownership in " free 
to air" television broadcastin g is limited to 30% , and 80% of the programming aired on "free to air 
channels" must be Brazilian.250 In the subscription television market, including satellite and cable 
television, content quotas require every channel to air at least three and a half hours  per week of 
Brazilian programming during prime time, thereby creating enormous demand for independently 
                                                
245 Presidential Decree No. 7512/2011.  
246 ANTEL Resolution No. 5 39 of 24 February 2010.  
247 Agência Nacional de Telecomunicações - ANATEL (2016), Relatório Anual 2015 . Viewed at: 
http://www.anatel.gov.br/Portal/verificaDocumentos/documento.asp?numeroPublicacao=342736&assuntoPubli
cacao=null&caminhoRel=null&filtro=1&documentoPath=342736.pdf . 
248 Brazil ranked fifth on the United States Department of C ommerce /International Trade Administration 
list of top 25 M&E export markets in 2016. M&E is an industry that is broader than audiovisual since the 
definition also includes publishing and videogames. U.S. Department of Commerce /International Trade 
Administ ration (2016), 2016 Top Markets Report - Media and Entertainment , October. Viewed at: 
http://trade.gov/topmarkets/pdf/Media_and_Entertainment_Top_Markets_Report.p df. 
249 U.S. Department of Commerce /International Trade Administration (2016), 2016 Top Markets Report 
- Media and Entertainment , October. Viewed at: 
http://trade. gov/topmarkets/pdf/Media_and_Entertainment_Top_Markets_Report.pdf . 
250 USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barriers . Viewed at: 
https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -national -trade -
estimate . WT/TPR/S/358 • Brazil  
 
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  produced national content to be acquired or co ‐produced by channels in order to fulfil the 
quotas.251 One third of all channels included in any television package must be Brazilian. 
Subscription television programmers are also subject to the 11% CONDECINE levy on remittances, 
which can be waived if an a mount equal to at least 3% of remittances is invested in local 
productions.  
4.162.   The Federal Government has dedicated many resources to grow ing the domestically filmed 
entertainment sector.252 Since 2014 , a R$921 million "A Cinema Near You" project has provided 
film and TV incentives aimed at expanding the movie theatre industry . This project is publicly 
funded and managed by the National Film Agency (ANCINE), which is the programming and 
advertising regulatory authority, and its Audiovisual Sector Fund (FSA) in cooperation with BNDES.  
4.163.   A fixed tax on each foreign film released in theatres, on foreign home entertainment 
products, and on foreign programming for broadcast television is levied; the taxes seem 
significantly higher than the corresponding taxes levied o n domestic productions.253 Remittances to 
foreign producers of audiovisual works are subject to a 25% income withholding tax; the producer 
can elect to invest 70% of this tax in local independent productions. In addition, local distributors 
of foreign films are subject to a levy of 11% of remittances to the foreign producer; the authorities 
indicated that the same rules apply to local films. This levy, a component of the CONDECINE 
(Contribution to the Development of a National Film Industry), is waived if the  producer agrees to 
invest 3% of the remittance in local independent productions  same as for subscription TV 
programming. The CONDECINE levy is also assessed on foreign video and audio advertising.  
4.164.   All films and television shows must be printed locally , as importation of colour prints for 
the theatrical and television markets is prohibited; audiovisual content distributed in six copies or 
less do not need to be printed locally.254 Domestic film quotas also exist for theatrical screening 
and home video distri bution.  
4.4.5   Transport  
4.165.   During the review period, the share of transport (including storage and courier) in total 
trade in services remained stable, albeit a minor drop was registered from 4.5%  in 2012  to 4.4% 
in 2016 (Table 1.1) . In 2016, transport services ac counted for 13.8%  (11.3% maritime, 3% air)  of 
services imports  and 15.2% (8.7% maritime, 4.8% air) of services  exports (Table 1.5). Brazil's 
merchandise export transportation mix is as follows: 56.5% maritime; 22.5% air; 20.7%  road; 
0.2% river; and, 0.1% r ail.255  
4.166.   Transport, logistics and credit command a large share of expenses incurred by 
manufacturers on intermediate services, but according to the OECD they suffer from severe 
deficiencies in infrastructure as well as limited competition pressure.256 Transpor t services  are 
mostly composed of maritime and air transport services; land transport suffers from numerous 
bottlenecks that Brazil has tried to address through public investment and private participation in 
infrastructure development. Brazil seemingly has  inferior overall infrastructure quality relative to 
                                                
251 Law No. 12.485/2011; USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barriers . 
Viewed at: https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -national -
trade -estimate ; and U.S. Depart ment of Commerce/International Trade Administration (2016), 2016 Top 
Markets Report - Media and Entertainment , October. Viewed at: 
http://trade.gov/topmarkets/pdf /Media_and_Entertainment_Top_Markets_Report.pdf . 
252 U.S. Department of Commerce/International Trade Administration (2016), 2016 Top Markets Report 
- Media and Entertainment , October. Viewed at: 
http://trade.gov/topmarkets/pdf/Media_and_Entertainment_Top_Markets_Report.pdf . 
253 The list of rates of these taxes are available at: Portaria Interministerial No. 835 of 13 October 2015 . 
Viewed at: http://www.ancine.gov.br/sites/default/files/portarias/Portaria%20n%C2%BA835_condecine.pdf ; 
and USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barriers . Viewed at: 
https://ustr.gov/about -us/policy -offices/press -office/reports -and-publications/2016/2016 -national -trade -
estimate . 
254 USTR (2016), 2016 National Trade Estimate Report on Foreign Trade Barriers . Viewed at: 
https://ustr.gov/about -us/policy -offices/pr ess-office/reports -and-publications/2016/2016 -national -trade -
estimate . 
255 Confederação Nacional Da Indústria (CNI)/FGV -EAESP (2016), Desafios à Competitividade das 
Exportações Brasileiras , Brasilia.  
256 OECD (2016), Services and Performance of the Brazilian Economy - Analysis and Policy Options , 
unclassified document TAD/TC/WP(2016)13/FINAL, 8 September.  WT/TPR/S/358 • Brazil  
 
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  almost all its export competitors.257 Its scores for adequacy of physical capital across all areas of 
transport infrastructure – roads, ports, railroads and air transport infrastructure – are substantially  
lower than those of its main export competitors. Infrastructure gaps in transport appear more 
dramatic when quality and quantity indicators are coupled with Brazil's transportation mix , as 60% 
of its agricultural commodities are transported by road, while  most of the exported iron ore travels 
by rail. Ports and airports are also constrained; although the port of Santos (São Paulo) was in the 
top-100 list of best ports in the world in  2013, occupying the 41st position, thanks to a 6.2% rise in 
throughput in  2012. While part of the growing infrastructure gap may be due to inadequate 
maintenance and intensification of use, the largest share of the gap is most likely due to a 
prolonged period of underinvestment relative to other countries.  
4.167.   Between 2011 and 2014 , a series of infrastructure investment projects were approved as 
part of the second phase of the Growth Acceleration Program me.258 These projects included the 
expansion of transport capacity via the extension of highways , roads, and railways, as well as  the 
construction of new ports and airports while improving existing ones. Nevertheless, it seems that 
the implementation of these projects has not been very time -effective and results remain so far 
limited. More recently, initiatives to tackle infrastructure bottlenecks included the launch  of a 
Logistics Investment Program me (PIL) to promote private investment in infrastructure projects 
through a series of concessions, leases and authorizations. By March 2017 , a Brazil -China 
US$20  billion joint fund was to beg in financing infrastructure projects, including bidding for 
government -sponsored road, port, airport and logistics operating licences . The fund is to finance 
the construction of railroads linking Brazilian soy - and corn -producing belts to ports . China 
provides three quarters of the fund (US$15 billion), while the state -run banks BNDES and Caixa 
Economica Federal  provide the rest.259  
4.4.5.1   Air transport  
4.4.5.1.1   Airline services  
4.168.   Brazil is the world's third (fourth in 2012) largest domestic aviation market and second in 
terms of number of airports.260 In 2015 , both the domestic and international air transport markets 
registered a decline in the number of operated flights reflecting the slowdown of the country's 
economy.261 Concerning the domestic and international passenger marke ts, aircraft utilization also 
known as load factor stood at 79.9% in 2015, 0.9% less than in 2014, registering a first reduction 
after 5  consecutive years of rise. The average domestic air fare for scheduled passenger 
transportation was estimated in real t erms at R$334.5 in 2015, corresponding to a direct average 
distance of 1,105 km between the origin and the destination of the passenger, regardless of 
stopovers or connections ; this fare was  9% lower than the 2014 average fare which corresponded 
to an  average direct distance of 1,072 km. Between January and November 2016, 21.3% of 
Brazil's imports (by value) and 5.9% of its exports were moved via air cargo compared to 17%  of 
imports  and 4.3%  of exports  in 2011. Brazilian companies accounted for 24% of total  international 
air cargo transported in the country in 2015, compared to 22% in 2014.  
4.169.   The air transport market remains highly concentrated; no domestic companies with state 
participation operate in this segment and no  mergers or take-overs took place from  2013 onwards 
in this market . In 2015, 13 Brazilian companies provided scheduled and non -scheduled public air 
transport services (excluding air taxi), of which three provided mainly cargo operations . In the 
same year , a total of 79 companies provid ed international air transport services , of which 
                                                
257 Mercedes Garcia -Escribano, Carlos Goes, and Izabela Karpowicz (2015), Filling the Gap: 
Infrastructure Investment in Brazil , IMF Working Paper WP/15/180, Ju ly. Viewed at: 
http://www.imf.org/external/pubs/ft/wp/2015/wp15180.pdf . 
258 OECD (2016), Services and Performance of the Brazilian Economy - Analysis and Policy Options , 
unclassified doc ument TAD/TC/WP(2016)13/FINAL, 8 September.  
259 Reuters online information, "Brazil Expects $20b Fund with China to Begin Financing Projects by 
March", 9 January 2017. Viewed at: http://www.reuters.com/article/brazil -china -infrastructure -
idUSL1N1EZ0PJ . 
260 The authorities indicated that this ranking is dynamic and it depends on the evolution of other 
domestic markets, for which they do not have constant updated data. Secret ariat of Civil Aviation online data. 
Viewed at:  http://www.aviacao.gov.br/assuntos/aeroportos . 
261 Agência Nacional de Aviação Civil – ANAC (2016), Anuário do Transporte Aéreo 2015 , 3 October. 
Viewed at: http://www.anac.gov.br/assuntos/dados -e-estatisticas/dados -do-anuario -do-transporte -aereo . WT/TPR/S/358 • Brazil  
 
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  23 operated only in the cargo transportation market.262 Among Brazilian companies, four (Gol, 
Tam, Azul, and Avianca) represented individually only  1% of the domestic market share (in terms 
of revenue passenger kilom etres (RPK)) and 98.4% of the passengers transported on domestic 
flights in the country . Among the main cargo companies , LATAM Cargo Brasil  (previously Absa LAN 
cargo) carried 12.6% of the total cargo freight in the domestic market. Brazilian companies 
accounted for 32.8% of international flights to and from Brazil in 2015, compared to 28.4% 
in 2014. While the number of international flights by Brazilian companies grew by 49% from 2006 
to 2015, those of foreign companies grew faster at 64%. Tam, Gol and Azu l accounted for 94.8% 
of international flights operated by Brazilian companies; considering both domestic and foreign 
carriers, these three Brazilian companies had  shares of  18.3%, 11.5% and 1.3% in flights in 2015 , 
respectively, whereas the foreign compan ies American Airlines, Copa Airlines, Tap, and Austral had 
shares of 7.2%, 5.7%, 5.0% and 3.2% respectively.  
4.170.   The institutional framework governing the aviation sector was changed in 2016.263 The 
Civil Aviation Secretariat (SAC/PR) was directly linked to the  Presidential Executive Office and 
headed by a Chief -Minister and was responsible for, inter alia,  formulating policies and strategic 
plans for the development of the civil aviation sector, overseeing plans to open up airport 
investment to private companie s, approving concessions to build new airports and terminals, and 
delegating to the states, Federal District, and municipalities the management, operation, and 
maintenance of public airfields . Its portfolio was transferred to the Ministry of Transportation , Ports 
and Civil Aviation (MTPA), thus merging SAC/PR into MTPA's  structure.264 The Civil Aviation Council 
(CONAC), chaired by the Minister of Transportation, Ports and Civil Aviation (previously the 
Chief-Minister of SAC/PR), is now in charge of advising t he President in matters of civil aviation 
policy and setting guidelines for the sector. The National Agency for Civil Aviation (ANAC) is in 
charge of the regulation and supervision of civil aviation . Its responsibilities include, inter alia , 
regulating saf ety and security matters related to civil aircraft, certifying aircraft and granting 
airline operation permits, conducting bidding  procedures  for airport concessions, regulating the 
allocation of slots in congested airports, and licensing civil aviation pe rsonnel.265 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.  
Regulatory and operational framework  
4.171.   The main legal instrument remains th e Brazilian Aeronautical Code (CBA) of 1986, last 
amended in 2016.266 In addition to minor changes to the CBA, the ATAERO surcharge on airport 
fees was suppressed ( Section  4.5.5.1.2); an increase of foreign capital participation in Brazilian air 
carriers rem ains under discussion.267 Concessions for the provision of domestic scheduled air 
transport services are granted only to Brazilian legal persons with headquarters in Brazil, managed 
exclusively by Brazilians, and in which four fifths of voting rights are in Brazilian hands.268 
Domestic public air transport services (cabotage) remain reserved to Brazilian legal persons.269 
The lease of foreign aircrafts requires prior authorization.  
4.172.   Domestic air fares are determined freely by airline companies, with no prior appro val being 
necessary. However, companies must report their fares on a monthly basis to ANAC for statistical 
purposes.270  
                                                
262 Agência Nacional de Aviação Civil – ANAC (2016), Anuário do Transporte Aéreo 2015 , 3 October. 
Viewed at: http://www.anac.gov.br/assuntos/dados -e-estatisticas/dados -do-anuario -do-transporte -aereo . 
263 More information on the institutional framework is available in WTO document WT/TPR/S/283/Rev.1, 
26 July 2013.  
264 Law 13,341, 29 September 2016.  
265 Law No. 11,182 of 27 September 2005.  
266 Law No. 7,565 of 19 December 1986; Law 13,319, 25  July 2016. OECD (2016) , Services and 
Performance of the Brazilian Economy - Analysis and Policy Options , unclassified document 
TAD/TC/WP(2016)13/FINAL, 8 September.  
267 Law No. 7,565 of 19 December 1986. Amendments to the Brazilian Aeronautical Code – CBA are 
being discussed at t he National Congress but were not approved yet. The increase of foreign investments on 
Brazilian air carriers also remains under discussion within the Brazilian Government.  
268 Articles 180 and 181 of Law No. 7,565 of 19 December 1986.  
269 Article 216 of Law N o. 7,565 of 19 December 1986.  
270 Article 49 of Law No. 11,182 of 27 September 2005, and ANAC Resolution No. 140/2010.  WT/TPR/S/358 • Brazil  
 
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  4.173.   Since 2006 , an administrative model for the allocation of arrival and departure times at 
airports (slots) has applied , which preserves th e slots of companies that already operated at the 
airport with capacity restrictions (grandfathering model); this model was deemed restrictive to the 
entry of new firms.271 To address some criticism s as well as to promote the efficiency, quality and 
comprehe nsiveness of the services provided, in 2014 , ANAC Resolution No. 338/2014 was enacted 
establishing the coordination parameters and rules for the allocation of slots at all airports that 
present a relevant degree of saturation. Under this regulation , a comp any must comply with a 
minimum of 80% of regularity and 75% of punctuality for maintenance of the series of slots, and 
50% of new slots should be allocated for new entrants. These measures aim to optimizing the 
allocation of slots in saturated airports, pr omote efficiency , and increase competitiveness, thus 
improving the public services to air transport users in Brazil.272 According to the OECD, the 
allocation of airport slots through grandfathering and the fact that commercial exchange of slots is 
not allowe d contribute to favouring incumbent carriers, as the availability of take -off and landing 
slots may represent a significant bottleneck in congested airports at peak hours.273 Furthermore, 
according to IATA, the 2014 regulation differs significantly from the Worldwide Slot Guidelines 
(WSG), the accepted global standard for the policies, principles, and procedures of airport slot 
management, and the industry continues to advocate for amendments.274 Currently, ANAC is 
responsible for the coordination of four airports (Level 3): Congonhas Airport – São Paulo (SBSP), 
Guarulhos Airport (SBGR), Santos Dumon Airport (SBRJ) and Pampulha Airport (SBBH). In 
addition to these airports, four others are classified as Airports of Interest (Level 2) and are under 
the responsibi lity of the airport operator: Galeão Airport (SBGL), Viracopos Airport (SBKP), Confins 
Airport (SBCF) and Brasília Airport (SBBR).  
4.174.   Since 2015 , ANAC has been revising regulations on the general conditions of carriage and 
passenger rights in Brazil. On 14 M arch 2017 , the General Conditions of Carriage entered into 
force, introducing regulation s based on international best practices and in line with the Brazilian 
Consumer Protection Code (allowing the consumer the right to cancel a purchase before its 
complet ion); the harmonization between the general conditions of carriage and the Consumer 
Protection Code is important to promote regulatory stability and to reduce judicial cases.275 As 
from 14  March  2017, the air transport companies have been free to include che cked baggage in 
the ticket  price or to charge separately.  
4.175.   Civil aviation policy pursues greater insertion of Brazilian aviation in to international 
markets to improve the country's connectivity, through the conclusion of air services agreements 
(ASAs) . Virtually no new ASAs (except for one with the Philippines in 2013) were signed during the 
review period (Table A4.2). Brazil maintains 102 bilateral ASAs, including open skies agreements 
with more than 49 countries . Renegotiations of existing ASAs or negotiat ions for new ASAs are 
under way with several partners , and from 2013 onwards MoUs were signed with Aruba ; 
Cabo Verde ; Congo (Dem. Rep. of) ; Curaçao ; Egypt ; Guinea -Bissau ; Hong Kong , China ; Israel ; 
Côte d'Ivoire ; Jamaica ; Japan ; Mauritius; Namibia ; Nigeria ; Norway ; Philippines ; Serbia;  
Seychelles ; Saint  Maarten ; Sri Lanka ; Sudan ; Tanzania;  Togo; Turkey ; Viet Nam ; Yemen ; and 
Zambia.  Most ASAs grant at least 5th freedom rights, and in most cases include clauses on 
cooperation and code -sharing, multiple designa tion, and free -pricing; most of the renegotiated 
agreements also contain free determination of capacity clauses. Most ASAs date back nearly 
20 years and most score between 10 and 20 (out of a possible maximum of 50) on the 2011 Air 
Liberalization Index (AL I) of the WTO.276 This is largely a reflection of the absence of any 
7th freedom or cabotage traffic rights.277  
                                                
271 ANAC Resolution No. 02/2006.  
272 International Air Transport Association (2015), Annual Review 2015 – 71st Annual General Meeting , 
June. Vi ewed at: http://www.iata.org/about/Documents/iata -annual -review -2015.pdf ; and International Air 
Transport Association (2016), Annual Review 2016 – 72nd Annual General Meeting , June. Viewed at: 
http://www.iata.org/publications/Documents/iata -annual -review -2016.pdf . 
273 The authorities indicated that they do not share this observation. OECD (2016) , Services and 
Performance of the Brazilian Economy - Analysis and Policy Options , unclassified document 
TAD/TC/WP(2016)13/FINAL, 8 September.  
274 International Air Transport Association (2015), Annual Review 2015 – 71st Annual General Meeting , 
June. Viewed at: http://www.iata.org/about/Documents/iata -annual -review -2015.pdf ; and International Air 
Transport Association (2016), Annual Review 2016 – 72nd Annual General Meeting , June.  Viewed at: 
http://www.iata.org/publications/Documents/iata -annual -review -2016.pdf . 
275 ANAC Resolution No. 400 of 13 December 2016.  
276 WTO online data. Viewed at: https://www.wto.org/asap/index.html . 
277 The authorities indicated that in the context of the negotiation of an ASA, Brazil tries to replace 
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  4.176.   Brazil participates in the Fortaleza Agreement on regional air transport services covering 
all routes that are not operated under bilateral agreeme nts among the parties.278 It is also a 
signatory to the 2012 Multilateral Open Skies Agreement for the member States of the Latin 
American Civil Aviation Commission (LACAC) with reservations regarding 7th, 8th and 9th freedom 
traffic rights. The agreement wa s sent to the National Congress in August 2016 and will  enter into 
force in Brazil after its ratification.  
4.4.5.1.2   Airport and auxiliary services  
4.177.   During the review period , airport capacity has increased by 63% from 223.9  million 
passengers per year (2011) to 365.8 6 million passengers per year (2016) due to infrastructure 
development including expansion by 43% in aircraft parking patios, 74% in passenger terminals , 
and 78% in the number of boarding bridges. As a result , the pun ctuality index (delays up to 
30 minutes ) of flights improved from 85.5% in 2011 to 91.9% in 2016.279 However, it seems that 
some bottlenecks, in particular in São Paulo – the country's most important hub, persisted 
in 2014.280 In 2015 , around 80% of boarded cargo was concentrated in 10 airports: Sã o Paulo 
(GRU), Manaus, Brasília, São Paulo (Congonhas), Rio de Janeiro (Galeão), Fortaleza, Recife, 
Salvador, Belém and São Paulo (Campinas). The three biggest airports in terms of  domestic cargo 
accounted for  23% of the cargo transported in the country.281 In 2015 , the 20 largest airports 
accounted for 81% of domestic landings; those with the highest number of departures were 
Guarulhos/SP (10.8%), Congonhas/SP (9.2%) and Brasília/DF (8.4%) , respectively, which 
together accounted for 28.4% of domestic flight take-offs.282  
4.178.   As of 2016 , Brazil maintained 2,564 airports (18 international) and airstrips of which 
606 were state -owned compared to 1,875 and 722 in 2012 , respectively.283 INFRAERO, a public 
enterprise linked to the SAC/MTPA, remains in charge of the operat ion and management of 
60 main commercial airports, 68  air navigation support stations, and 28 cargo terminals across the 
country compared to 64, 120  and 34 respectively in 2012; t his reduction was mainly due to the 
implementation of the airports concession s programme (see below) .284 The airports managed by 
INFRAERO are fully owned by the Federal Government or in partnership with the states and 
municipalities (see below). All other INFRAERO  airports with concessions signed up until 2015 are 
managed by a Specia l Purpose Entity (SPE), in which INFRAERO holds 49% of the capital. In 2015, 
INFRAERO's airports handled Brazil's regular air traffic equivalent to 1.8 million take -offs and 
landings, and transported 122  million passengers and 287.5 million tonnes of cargo .  
4.179.   The institutional framework governing airports and auxiliary services remains 
unchanged.285 The National Civil Aviation Fund (FNAC), which is administered by the SAC/MTPA 
and financed through the revenues from airport concession fees, part of the internat ional boarding 
fees, and from the ATAERO surcharge applied on airport fees (until 2016, see below), continues to 
provide resources for the development of airport and air traffic control infrastructure. The National 
Airport Authorities Commission (CONAERO),  remains responsible for coordinating and organizing 
                                                                                                                                                  
place of business and regulatory control. It supports free pricing, free capacity determination and traffic rights 
up to 6th freedom. Brazil refrains from negotiating 7th freedom traffic rights due to the lack of evid ence 
regarding their possible positive impact on the sector.  
278 Other signatories are Argentina, the Plurinational State of Bolivia, Chile, Paraguay, Peru, and 
Uruguay.  
279 Further information on the Brazilian airports' capacity expansion is available at Avia ção online 
information. Viewed at: http://www.aviacao.gov.br/5anos/ . 
280 The opening of new Terminal 3 at São Paulo Guarulhos failed to address long -standing operational 
bottlenecks, such as outbound immigrati on and transfer queues, and has not improved the transfer process or 
time. This is an example of how insufficient user consultation can limit the return on major infrastructure 
investments. International Air Transport Association (2015), Annual Review 2015  – 71st Annual General 
Meeting , June. Viewed at: http://www.iata.org/about/Documents/iata -annual -review -2015.pdf . 
281 ABEAR (Brazilian Association of Air Carrie rs) and ANAC (Civi l Aviation National Agency) online data. 
Viewed at: http://www.abear.com.br/dados -e-fatos. 
282 Agência Nacional de Aviação Civil – ANAC (2016), Anuário do Transporte Aéreo 2015 , 3 October. 
Viewed at: http://www.anac.gov.br/assuntos/dados -e-estatisticas/dados -do-anuario -do-transporte -aereo  
283 ANAC online data. Viewed at: http://www.anac.gov.br/Anac/assuntos/setor -regulado/aerodromos . 
284 INFRAERO (2016), Relatório Anual  2015. Viewed at: 
http://www.infraero.gov.br/images/stories/Infraero/Contas/Relatorios/relatorio2015.pdf . 
285 More information on the institutional framework is available in WTO document WT/TPR/S/283/Rev.1, 
26 July 2013.  WT/TPR/S/358 • Brazil  
 
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  the activities of all government bodies and agencies that operate in airports (e.g. Customs, 
migration, health, etc.), and headed by the SAC/MTPA.  
4.180.   Upgrading infrastructure remains critical for improving  international competitiveness. 
Under the Growth Acceleration Program me (PAC) , in the course of 2015, INFRAERO prioritized 
investments in its airports located in cities hosting the 2016 Olympic Games as well as in regional 
aviation development works, major  resumed works and the acquisition of vehicles and equipment 
aimed at modernizing airport security and operations.286 As from May 2011 , private investors have 
been allowed to build, manage, and operate airports through concessions, a fundamental factor for 
the development and modernization of the airport infrastructure in Brazil. No legal restrictions for 
the participation of foreign investors in Brazilian airports are in place though so far many large 
public airports have been managed by the state -owned ente rprise INFRAERO. All concessions must 
have prior approval from the SAC/MTPA, while the ANAC is in charge of carrying out the bidding 
procedures. In line with a concessions programme for private participation in expanding 
infrastructure and operating airpor ts, between 2012 and 2015 six international airports 
(São Gonçalo de Amarante/RN, Guarulhos/SP, Viracopos/SP, Brasília/DF, Confins/MG and 
Galeão/RJ)  were passed from INFRAERO to private management; INFRAERO retained 49% of the 
shares in each of the concess ionaries.287 Since 2012, approximately R$10 billion were invested in 
these six airports and further investment should exceed R$26 billion during the period of the 
concession (20 -30 years); it should expand the cap acity of these airports from 
80 million  passe ngers (2011) to 270 million passengers in 2032. On 9 July 2015, the second phase 
of the Investment Program me in Logistics (PIL 2 ) was announced to transfer  four airports 
(International of Porto Alegre/RS, Salvador/BA, Florianópolis/SC and Fortaleza/CE) to the private 
sector. Their auction is scheduled for the first half of 2017 and approximately R$6.5 billion are 
expected to be invested during the concession term.  
4.181.   The ANAC determines ceiling fees for different airport services and adjusts them annually; 
the fees are applied to the service provided ( i.e. boarding, connection, landing and 
permanence).288 The boarding fees for domestic and international flights are different, but 
according to the authorities there is no discrimination between national and foreig n air carriers, as 
the fee charged is the same for the same service provided. Airport services (e.g. take -off, landing, 
and parking of aircraft, and storage of air cargo) were subject to the Additional Airport Tax 
(ATAERO), at a rate of 35.9% on service fe es until it was terminated  at the end of 2016.289  
4.182.   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 
maintenance services in Brazil, provided they obtain a Brazilian maintenance -shop ce rtification and 
a Certification of Approval of the Company issued by the ANAC. Brazilian airlines may contract 
maintenance services abroad.  
4.4.5.2   Maritime transport and ports  
4.4.5.2.1   Shipping  
4.183.   During the review period , 94.8% of Brazil's merchandise trade (domestic and f oreign) was 
carried by sea of which 4.6%  was transported by national flag vessels. Brazil's national flag 
merchant fleet capacity rose from 3.4 million deadweight tonnes (dwt) in 2010 to 4.3  million dwt 
in 2016.290 According to UNCTAD data, in 2016 Brazil ow ned the world's 25th (21st in 2011) largest 
fleet in dwt terms (0.88% of total dwt) consisting of 15.8 million dwt (387  vessels) – or 22% less 
than in 2015; this drop was due to the reduction of Brazilian -owned foreign flagged vessels 
(mostly in Singapore,  Panama and Liberia) which represented a 76.6% (151  vessels) dwt share 
                                                
286 INFRAERO (2016), Relatório Anual  2015. Viewe d at: 
http://www.infraero.gov.br/images/stories/Infraero/Contas/Relatorios/relatorio2015.pdf . 
287 INFRAERO (2016), Relatório Anual  2015. Viewed at: 
http://www.infraero.gov.br/images/stories/Infraero/Contas/Relatorios/relatorio2015.pdf . 
288 The latest adjustments are contained in ANAC Resolution No. 216 of 30 January 2012.  
289 Law No. 13,319 of 25 July 25 2016.  
290 UNCTAD online data. Viewed at: http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx . WT/TPR/S/358 • Brazil  
 
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  compared to 80.2% the previous year.291 In 2015 , the national flag fleet consisted, in dwt terms, 
mainly of oil tankers (39.8%), bulk carriers (19.5%) and container ships (17.6%) , reflect ing the 
structure of Brazil's merchandise exports.292 It remains concentrated, with the five largest 
operators controlling 88.3% (2016) of the market (83.4% in 2011) . As at 2016 , the largest 
Brazilian flagged fleet (international and domestic routes) was own ed by the state company 
PETROBRAS/TRANSPETRO ( Section  4.4.3.1), with 62 ships and 62.9% of total dwt, followed by 
Alliança (10.1%), ELCANO (8.2%), Log -in (3.9%) and Norsul (3.2%).293  
Policy and institutions  
4.184.   Brazil's national maritime policy plan dates back to 1994 and its objectives remain 
unchanged. In 2016 , the Secretariat of Ports was integrated into the Ministry of Transportation, 
Ports and Civil Aviation (MTPA) ( Section  4.5.5.1.1). The Secretariat of Ports formulates policies 
and guidelines for the deve lopment and promotion of the maritime, river and lake ports and port 
facilities sector. Brazil's regulatory agency for maritime services remains the National Waterways 
Transport Agency (ANTAQ), a public -law independent agency linked to the MTPA 
(Section  4.5.5.2.2).294 The ANTAQ regulates and supervises the Port Authority, the federal 
waterway infrastructure, private terminals , and shipping companies.  
Regulatory and operational framework  
4.185.   The main regulatory framework governing maritime services remains unchan ged.295 
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. In order to 
operate as a Brazilian navigatio n company, only registration for legal persons is required, with 
representation and administration in Brazil. Brazil does not impose foreign equity restrictions. No 
restrictions apply to the origin of capital for the establishment of a multimodal transport  operator 
in Brazil. 296  
4.186.   Reciprocity is required in international maritime transport services as specified in 
international agreements signed by Brazil.297 As of 2017 , Brazil had bilateral agreements on 
maritime transport services with 11  countries, of which three (with Argentina, Chile,  and Uruguay) 
had cargo -sharing provisions.298 As at March 2017 , the maintenance of the agreement with Chile 
was under consideration.  
4.187.   Cargo of government entities (including public enterprises), and goods benefitting from 
official tax or credit programmes must be transported by Brazilian -flag vessels.299 Exports of crude 
oil extracted in Brazil must also be transported by Brazilian -flag vessels unless there is no such 
availability. In case of non -availability of a ship with a Brazi lian flag or the flag of the importer or 
exporter for transporting freight, ANTAQ may release the shipment to a specifically designated 
third flag ship. When no Brazilian flag ship is available or the fares are considered unreasonable, a 
permit (certificat e of release of cargo prescribed, CLCP) may be issued for the carriage of import 
cargos by foreign flagged vessels; 1,960 certificates were issued in 2014, 1,994 in 2015 , and 
                                                
291 UNCTAD online data. Viewed at: http://unctadstat.unctad.org/wds/TableViewer/tableView.aspx ; and 
UNCTAD (2016), Review of Maritime Transport 2016 . Viewed at: 
http://unctad.org/en/PublicationsLibrary/rmt2016_en.pdf . 
292 UNCTAD online Maritime Profile. Viewed at: 
http://unctadstat.unctad.org/CountryProfil e/MaritimeProfile/en -GB/076/index.html . 
293 ANTAQ online information. Viewed at: 
http://www.antaq.gov.br/Portal/Frota/ConsultarFrotaGeral.aspx  and http://www.antaq.gov.br/anuario .  
294 More information on the institutional framework is available in WTO document WT/TPR/S/283/Rev.1, 
26 July 2013.  
295 It mainly consists of: Law No.  9,432 of 8 January 1997; Law No. 7,652 of  3 February  1998; a nd Law 
No. 10,233 of 5 June 2001.  
296 Law No. 9,611 of 19 February 1998 and Decree No. 3,411.  
297 Article 178 of the Constitution and Article 5 of Law No. 9,432 of 8 January 1997.  
298 These countries are: Algeria, Argentina, Chile, China, France, Germany, Poland , Portugal, the 
Russian Federation, the United States, and Uruguay.  
299 Decree Law No. 666 of 2 July 1969.  WT/TPR/S/358 • Brazil  
 
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  1,386 in 2016. Foreign vessels that enter Brazilian ports are charged a specific lighthouse fee, with 
exemptions for vessels under 1,000 dwt and in cases of reciprocity under bilateral trade 
agreements ( Section  4.5.5.2.2).300 
4.188.   Cabotage is reserved for Brazilian -flag vessels operated by domestic shipping companies 
authorized by ANTAQ. Fore ign vessels may only participate in cabotage when chartered by a 
Brazilian shipping company, for which an authorization must be obtained. Authorizations waiving 
this restriction for foreign vessels may be granted when: a Brazilian -flag vessel of the requir ed 
type is not available; for public interest reasons; or if the foreign vessel replaces a vessel that is 
under construction at a Brazilian shipyard.301 Between July  2013 and 2016, 7,268 (5,434 in 
2008-11) such waivers were granted for the chartering of fore ign vessels in cabotage navigation, 
mainly due to the inexistence or unavailability of Brazilian flag vessels of the type and size suitable 
for the intended transport.302  
Domestic support  
4.189.   Domestic support in the form of tax measures remains in place. The Ad ditional Freight 
Charge for the Renovation of the Merchant Navy (AFRMM), a federal tax levied on maritime 
freight, continues to be applied on the combined cost of freight and insurance at rates 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 cargos in Brazil's north and 
north -east regions.303 The AFRMM is levied only on unloaded (domestic and import) cargos; transit 
and export carg os are exempt. 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.  
4.190.   AFRMM resour ces are deposited in the Merchant Marine Fund (FMM), which is managed by 
the MTPA , with BNDES, Banco do Brasil  and Caixa Economica Federal  as its financial agents, to 
finance the development of the Brazilian merchant fleet and shipyard industry through 
administered interest rate loans to domestic shipping companies ordering ships from domestic 
shipyards and to local shipbuilders producing vessels for domestic shipping companies. The 
conditions of these loans 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.).304 
Between  2012 and 2015 , the FMM allocated a total of R$19.7 billion  in credits to the shipping 
industry compared to R$8.9  billion in the period 2008 -11.305  
4.191.   Freight revenues from goods carried between Brazil and a foreign country by vessels 
registered at the Special Brazilian Registry (REB) remain exempt from the Contribution to the 
Social Integration Programme (PIS) and the Contribution to the Social Security Financing 
(COFINS).306 The construction, maintenance, repair, and modernization of vessels registered under 
the REB in Brazilian shipyards enjoy the same f iscal 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 platforms are exempt from the Tax on 
the Circulation of Goods and Services (ICMS).307 Reciprocal income tax exemption applies to 
foreign shipping companies domiciled in countries where Brazilian shipping companies benefit from 
the same treatment for international shipping traffic activities.308 Neither an estima te of the 
amount of foregone tax revenue through these measures nor an appraisal on the attainment of 
                                                
300 OECD (2016), Services and Performance of the Brazilian Economy - Analysis and Policy Options , 
unclassified document TAD/TC/WP(2016)13/FINAL, 8 Septem ber. 
301 Articles 7 and 9 of Law No. 9,432 of 8 January 1997.  
302 ANTAQ (2011).  
303 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 that must be included for purposes of determining t he sales tax (ICMS) on 
imports.  
304 Central Bank Resolution BACEN No. 3828 of 17 December 2009.  
305 National Monetary Council (CMN) 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].  
306 Provisional measure No. 2,158 -35 of 4 August 2001.  
307 Decree No. 25.403 of 2 Ju ly 1999.  
308 Income Tax Code (Article 176) and Decree Law No. 5,844 of 1943 (Article  30). WT/TPR/S/358 • Brazil  
 
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  any targets set (e.g. investment, output, employment, or exports) was available from the 
authorities.  
4.192.   Brazil signed the UN Convention on a Code of Conduct  for Liner Conferences in 1975 but 
has not ratified it yet , as its provisions on rejection of proposals on freight rates put forward by 
Liner Conferences (article 14, paragraph 6) do not conform with Brazilian law.309 Brazil is a 
member of the International Maritime Organization (IMO) and has ratified a number of IMO 
conventions related to maritime safety, prevention of maritime pollution, and civil liability, among 
others . During the review period , no action was taken to either sign or ratify any other IMO 
conventions or recent amendments to those that it is already a signatory.310 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, Par aguay, and Uruguay.  
4.4.5.2.2   Port services  
4.193.   During the review period , port cargo movement continued to increase. Between 2012 
and 2015, it rose from 904 million tonnes to 1  billion  tonnes . In the same period, private terminals 
continued to handle about 65% of total  cargo movements which mainly consist of loading (68.7% 
in 2012, 70.5% in 2015) rather than unloading merchandise.311 The main products transported 
remain commodities including iron ore, petroleum and petroleum products, soybeans, bauxite, 
corn, coal, and su gar, which  all together continue to account for almost three quarters of all cargo 
moved. Average dwell times for bulk vessels were reduced mainly due to the improvement in the 
operational efficiency of the terminals and the start -up of new private port te rminals. In 2015 , the 
average waiting and working times fell from  5.17 and 2.04 days respectively, compared to 
6.44 and 12.08 in 2014, and the estimated waiting costs dropped by 61%.312  
4.194.   In 2016 , there were 37 (35 in 2012) "organized" maritime and fluvial pu blic ports under 
the jurisdiction of the MTPA (see below), of which 18 were operated by state or municipal 
governments, and 19 (18 in 2012) were administered by the publicly  owned Companhia Docas ; 
the MTPA is in charge of another 39 inland fluvial ports.313 As at December 2016 , there were 
188 (134 in 2012) private port facilities/terminals (TUPs); many companies operate TUPs, mostly 
used for exporting their own cargos.314 Some of the ports and terminals specialize in the shipment 
of a single commodity (e.g. min eral ore in the ports of Ponta da Madeira and Tubarão). In 2015 , 
the main Brazilian ports in terms of tonnes of cargo handled were Santos (29%), Itaguaí (16%), 
and Paranaguá (12%).315 Concerning TUPs, Ponta da Madeira (19%) and Tubarão (17%) were the 
leaders  in cargo handled, followed by Tebar (7%, exclusively for oil cargo).   
Policy and institutions  
4.195.   During the review period , the port policy framework consisted of the 2013 National Ports' 
Plan, comprising a Master Plan, a Zone and Development Plan, and the Ge neral Port Concession 
Plan (PGO), as well as the 2014 Port Logistics Plan which was aimed at solving problems related to 
the lack of a uniform allocation of tasks and responsibilities between private and public entities.316 
At the time of the previous TPR, u nder a General Port Concession Plan (PGO) establishing the 
procedures for public port concessions, there were 159  potential areas for building new terminal 
                                                
309 UN online information. Viewed at: 
https://treaties .un.org/Pages/ViewDetails.aspx?src=TREATY&mtdsg_no=XII -
6&chapter=12&clang=_en#EndDec . 
310 IMO online information. Viewed at: 
http://www.imo.org/en/About/Convention s/StatusOfConventions/Pages/Default.aspx . 
311 ANTAQ (2014), Estatístico Aquaviário 2013 , 18 February.  Viewed at:  
http://www.antaq.gov.br/Portal/Anuarios/Anuario2013/index.htm ; and  ANTAQ (2016), Estatístico 
Aquaviário  2015, February. Viewed at: 
http://www.antaq.gov.br/Portal/PDF/Anuarios/ApresentacaoAnuario2015.pdf . 
312 UNCTAD (2016), Review of Mar itime Transport 2016 . Viewed at: 
http://unctad.org/en/PublicationsLibrary/rmt2016_en.pdf . 
313 SEP online information. Viewed at: http://www.portosdobrasil.gov.br/assuntos -1/sistema -portuario -
nacional  and http://www.portosdobrasil.gov.br/assuntos -1/gestao/companhias -docas . 
314 SEP online information. Viewed at: http://www.portosdobrasil.gov.br/assuntos -
1/investimentos/terminais -de-uso-privado . 
315 ANTAQ (2016), Estatístico Aquavi ário 2015 , February. Viewed at: 
http://www.antaq.gov.br/Portal/PDF/Anuarios/ApresentacaoAnuario2015.pdf . 
316 Ministerial Decrees SEP/PR No.15/2013 and SEP/PR No. 3/2014.  WT/TPR/S/358 • Brazil  
 
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  areas for ports to address bottlenecks and meet increasing demand . Furthermore, US$3 billion had 
been earmarked for dredging, port infrastructure, port logistics, and passenger terminals under 
the Growth Acceleration Plan/PAC -2 programme. Between 2010 and 2014 , more than R$1 billion 
were invested under the National Dredging Program me (PND) for the mainte nance and expansion 
of maritime access channels to public ports.  
4.196.   In 2016 , the Secretariat of Ports (SEP) was integrated into the MTPA. It is in charge of 
developing plans in accordance with the policies and guidelines of integrated logistics, covering 
both port access and infrastructure and urban development.317 The MTPA nominates the presidents 
of the Port Authority Councils (CAP), which are advisory bodies in all port administrations,  and of 
the state -owned Companhia Docas , which also participates in the Po rt Authority Councils.318  
Regulatory and operational framework  
4.197.   During the review period , changes were brought to the regulatory framework governing 
port services. A new Port Law, which regulates direct and indirect public use of ports and their 
installatio ns along with activities deployed by port agents,  was enacted in 2013 to raise 
competitiveness, increase competition , and promote the development of the sector.319 The main 
changes under the new Law included the centralization of port planning at SEP, the re lease of 
private terminals for the handling of third -party cargos and the transformation of the CAPs from 
deliberative to consultative bodies. Other areas of regulatory change included: conflict arbitration 
in the port sector; rules and proceedings to reco mpose  the economic and financial balance in 
signed grant contracts; validity term extension in grant contracts; and chartering of vessels by 
Brazilian shipping companies in port support navigation, maritime support, cabotage and 
long-course  shipping . The r egulatory framework still allows the leasing of public port areas and 
facilities to the private sector, including foreign companies. Many activities in the public ports are 
carried out by private local and foreign companies under leasing contracts, which h ave an initial 
duration of 25  years that is renewable for another period of 25  years. Firms supplying auxiliary 
port services must be established in Brazil, but foreign capital may participate and receive national 
treatment. The REPORTO scheme continues to  provide for IPI, COFINS, PIS, and import duty 
exemption on machinery and equipment used to modernize and expand ports (Table A3.2).  
4.198.   The lighthouse fee (TUF) on foreign vessels  to cover lighthouse operation costs , which is 
charged each time a foreign ship uses a port in a different Brazilian state, remains in place at the 
following rates: US$1,500 for vessels from 1,000 dwt to 50,000 dwt; US$2,250  for vessels from 
50,000 dwt to 100,000 dwt; and US$3,000 for vessels of over 100,000  dwt. Vessels under 
1,000  dwt are exempt. The TUF revenue 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. During the review period , TUF revenue rose from US$40 million 
in 2012 to R$101.52 million in 2013, R$ 110.73 million in 2014, R$151.23 million in 2015, and 
R$141.85 million in 2016 compared.  
4.199.   According to the authorities , port charges in Brazil are at a similar level to those at other 
ports in Latin America. Regarding public ports, there are two pricing schemes. For ports operated 
by the Public Port Authority charges are calculated under the "total cost of the service" model, and 
need ANTAQ approval; upon ANTAQ authorization , discounts for certain types of cargo may apply. 
The charges are set out in individual tables for each port and must be approved by ANTAQ; each 
port may independently decide to lower a certain charge (applicable in a uniform manner) without 
ANTAQ approval. For the le ased terminals, a "price cap" model may be established at the lease 
contract and discounts can be freely negotiated among the parties. A new port tariff and price 
regulation , updating the existing rules under a modern and reliable pattern (e.g. benchmarkin g the 
Brazilian energy sector) and providing enhanced discipline and dat a transparency, is to be set 
in 2018. Private terminal prices are not subject to control.  
                                                
317 Prior to the entry in force of the new Port Law no. 12,815/2013, each Port Authority was responsible 
for its individual port planning without ensuring that this planning was integrated with a national investment 
program me. 
318 Law No. 11,518 of 5 September  2007. More information on the institutional framework is available in 
WTO document WT/TPR/S/283/Rev.1, 26 July 2013. SEP online information. Viewed at: 
http://www.portosdobrasil.gov.br/assuntos -1/gestao/conselho -de-autoridade -portuaria -cap. 
319 Law No. 12,815/2013, Presidential Decree No. 8,465/2015, Ministerial Decree 499/2015 , Ministerial 
Decree No. 349 , Normative Resolution No. 01 -ANTAQ of 13 February 2 015, and Normative Resolution 
No. 05-ANTAQ of 23 February 2016.  WT/TPR/S/358 • Brazil  
 
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  4.4.6   Distribution and e -commerce  
4.4.6.1   Distribution  
4.200.   Distribution services (including retail and wholesal e) accounted for 12.5% of gross value 
added in  2016 (13.4% in 2012) and 22.9% (22% in 2013) of total employment (Table  1.1).320 The 
sector consists of large national and international distribution networks as well as of a large 
number of micro and small fami ly establishments; in 2014 , there were 1,647,204 firms (60.7% 
retail, 12% wholesale) employing 10,698,741 people.321 The importance of retail in the economy 
has been increasingly recognized and highlighted; besides being the largest generator of formal 
jobs, in the last four years the sector has shown significant revenue growth and consistent 
indicators of modernization.322 The Brazilian distribution market (retail and wholesale) is 
heterogeneous. Retail supermarkets and the retail appliance market are concentr ated, and there 
have not been any relevant changes regarding  mergers and acquisitions since 2013. As at 2015 , 
the supermarket chains segment accounted for 5.4% of GDP; the five largest companies (CIA 
Brasileira de Distribuição (Pão de Açucar), Carrefour Co m Ind Ltda, WalMart Brasil Ltda, Ceconsud 
Brasil Comercial Ltda, and Cia Zaffari Comércio e Industria) accounted for 55.2% of the outlets 
and 80.7% of the turnover of the 20 major chains operating in Brazil.323  
4.201.   The main legislation on distribution services remains the Commercial Law Code. Several 
municipal and state level regulations, the Code of Consumer Protection (CDC) and the new 
legislation on e -commerce govern the activity ( Section  4.4.6.2). No foreign equity limit is imposed 
in the sector, and no quot as or economic needs tests are applied in relation to the establishment 
or expansion of distribution services suppliers. No products are subject to exclusive distribution 
rights, and both franchising and direct selling are allowed.324 Commercial presence in retail 
services and franchising is unrestricted . Foreign entry in wholesale is allowed except for wholesale 
trade services of solid, liquid and gaseous fuels and related products where the foreign company 
must be legally established in Brazil and meet dome stic requirements.325 Furthermore, the 
Agreement on Economic and Trade Expansion Brazil -Peru, whose implementation is pending , 
contains WTO -plus commitments in distribution services (commissioned agent services, wholesale, 
retailing services, and franchising ) for which there is no limitation in cross -border supply, 
consumption abroad and commercial presence.326 Distribution sector activities are subject to the 
competition policy and consumer protection legislation ( Section  3.3.4.1).  
4.4.6.2   E-commerce  
4.202.   With retail e -commerce sales just below US$20 billion in 2015, Brazil is the only Latin 
American country in the top -10 worldwide ranking for retail e -commerce, and one of the fastest 
growing among these main markets.327 During the review period , e-commerce in Brazil regist ered 
fast growth , largely driven by the rising number of Internet users in the country.328 E-commerce 
                                                
320 Sistema de Contas Trimestrais. Viewed at: 
http://www.ibge.gov.br/home/estatistica/indicadores/pib/d efaulttabelas.shtm . 
321 Brazilian Institute of Geography and Statistics (IBGE) online information. Viewed at: 
http://brasilemsintese.ibge.gov.br/comercio.html  and 
http://www.sidra.ibge.gov.br/bda/comerc/default.asp?t=4&z=t&o=13&u1=1&u2=1&u3=1&u4=1 . 
322 U.S. Department of Commerce (2015), Doing Business in Brazil: 2015 Country Commercial Guide for 
U.S. Companies . Viewed at: http://www.iberglobal.com/files/2015/brazil_ccg.pdf . 
323 DIEESE (the Inter -union Department of Statistics and Socio -economic Studies) online information. 
Viewed at : http://www.dieese.org.br/boletimindicadoresdocomercio/2015/boletimIndicadoresComercio08.pdf . 
324 Law on franchising ( Lei sobre o contrato de franqui a empresarial ), 15 December 1994 
(http://www.planalto.gov.br/ccivil_03/Leis/L8955.htm  ). 
325 WTO document S/DCS/W/BRA, 24 January 2003, and Resolution No. 58 58, 17 October 2014. 
(http://www.lex.com.br/legis_26081041_RESOLUCAO_N_58_DE_17_DE_OUTUBRO_DE_2014.aspx  ). 
326 These commitments exclude: CPC 62118 - Sales on a fee or contract basis of goods;  CPC 62271 - 
Wholesale trade services of solid, liquid and gaseous fuels and related products; CPC 63297 - Retail sales of 
fuel oil, bottled gas, coal and wood . 
327 These estimates exclude sales of services online. Online E -Marketer information 
(https://www.emarketer.com/Article/Brazil -Ranks -No-10-Retail -Ecommerce -Sales -Worldwide/1011804  ) and 
Fung Global Retail & Technology, 8 March 2015 
(https://www.fbicgroup.com/sites/default/files/Overview%20of%20Brazil%20Ecom%20by%20Fung%20Global
%20Retail%20Tech%20Ma r.%208%202016.pdf ). 
328 Between 2012 and 2015 the online population increased from 75.4 million to 101.5 million, and the 
number of e -shoppers jumped from 24.3 million to 38.1 million. Ecommerce foundation (2016), Global B2C E -WT/TPR/S/358 • Brazil  
 
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  revenue was R$18.7 billion in 2011, R$22.5 billion in 2012, R$28.8 billion in 2013, R$35.8 billion 
in 2014  (accounting for about 1% of GDP ), R$41.3 billion in 2015 , and R$44.4 billion in 2016.329 
Despite the real's devaluation, 54% of Brazilian consumers purchased on foreign websites, thus 
enhancing cross -border e -commerce.330 Brazil ranks 3rd in South  America and 51st (out of 
137 countries) on UNCTAD's B2C (busi ness to consumer) E -commerce Index (2016), inter alia , 
due to its wealth factor.331 In 2015, the most popular Brazilian online retail websites included 
MercadoLibre, B2W Digital, Nova Pontocom, Buscape Company, Magazineluiza, and WalMart, 
whereas among forei gn websites Chinese websites accounted for 55% of total international 
purchases.332 The top five most used cross -border e -commerce platforms were Alibaba, 
Amazon.com, eBay, DealExtreme and Apple Store. Of the 20  most frequently used websites, 
12 are Chinese.  In 2016 , the market's largest segment was fashion (US$5.6 million), followed by 
electronic s and media (US$4  million); food and personal care (US$4  million); and, furniture and 
appliances (US$1.8  million). User penetration stood at 38.2% in  2016 and is predicted to reach 
55.7% in 2021; the average revenue per user was estimated at US$273.8 in 2016.333  
4.203.   The main e -commerce regulatory framework was last changed in 2014.334 It involves 
e-commerce requirements such as: full identification of the supplier on the sit e; provision of the 
physical and electronic address on the site; clear and precise information; the delivery of a 
summary and a full agreement; purchase confirmation; rules for online customer service; 
information security; the right of cancellation; rules  for requested chargebacks; and, rules for 
collective purchases.335 Furthermore, principles, guarantees, rights and duties for the use of the 
Internet in Brazil  were established under the 2014 digital marketing law . The Law,  inter alia , 
protects privacy and personal data  and exempts online content providers of various types from 
liability in relation to copyright infringement by means of a set of "safe harbo urs" while indicating 
that copyright violations will be dealt with by a future law ( Section  3.3.7).336 It also stipulates that 
public initiatives shall promote digital inclusion, seek to reduce regional gaps regarding the access 
and use of information technology and communication, and promote the production and 
dissemination of national content. The individua l federal states are in charge of regulating the 
implementation of these requirements (e.g. delivery terms).  
4.204.   Brazil has no de minimis  rule whereby goods below a certain value are exempt from 
customs duties and taxes. Virtually all i nternational e -purchase s are subject to  a 60% flat/single 
equalization tax on the purchase price covering/compensating customs duty and other internal 
taxes/charges on imports. Certain medicines (upon submission of specific documentation ) and 
printed books or periodicals are the  only exceptions to these tax requirements. An exemption 
(excluding the ICMS tax) for packages valued at US$50  or less  applies only to remittances issued 
by an person to another person for personal use or gifts of lower value but not for commercial 
operati ons. A Simplified Taxation Regime applies to goods not exceeding US$3,000.  
                                                                                                                                                  
commerce Report 2016 . Viewed a t: 
https://www.ecommercewiki.org/wikis/www.ecommercewiki.org/images/5/56/Global_B2C_Ecommerce_Report
_2016.pdf  
329 Online Webshopper Rep ort data. E -bit/Buscapé (2017), Webshoppers - 35th edition 2017 . Viewed at: 
http://www.ebit.com.br/webshoppers .  
330 FECOMÉRCIO (2016), WEBSHOPPERS , 33ª Edição . Viewed at: 
http://img.ebit.com.br/webshoppers/pdf/33_webshoppers.pdf . 
331 The index is based on four indicators: internet users; secure servers; credit card penetration; and, 
postal reliability score. UNCTAD (2016), UNCTAD B2C E -COMMERCE INDEX 2016 , UNCTAD Technical Notes on 
ICT for Development No. 7, April. Viewed at 
http://unctad.org/en/PublicationsLibrary/tn_unctad_ict4d07_en.pdf . 
332 U.S. Department  of Commerce (2015), Doing Business in Brazil: 2015 Country Commercial Guide for 
U.S. Companies . Viewed at: http://www.iberglobal.com/files/2015/brazil_ccg.pdf . 
333 Digital Market Outlook on line information. Viewed at https://www.statista.com/outlook/243/115/e -
commerce/brazil# . 
334 It consists of the 1990 Consumer Defence Code (CDC), Decree No. 7.962 15 March 2013, whic h 
regulates the CDC in order to adapt it to Brazil's e -commerce reality, and Law No. 12.965 ( Marco Civil da 
Internet ) of 23 April 2014.  
335 Decree No. 7,962 of 15 March 2013.  
336 Law No. 12,965 of 23 April 2014. Viewed at: 
https://www.publicknowledge.org/assets/uploads/documents/APPROVED -MARCO -CIVIL -MAY-2014.pdf . WT/TPR/S/358 • Brazil  
 
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  4.4.7   Tourism  
4.205.   Tourism's contribution to the economy of Brazil, which ranked 10th and 8th in the world in 
2015 in terms of the industry's contribution to GDP and employment, is significa nt.337 In 2014, it 
directly contributed 3.7% to GDP or 9.6% when related activities are taken into consideration . In 
the same year , it also accounted for 8.7 million direct, indirect and induced jobs, which 
represented 8.6% of Brazil's employment.338 In 2015 , its direct contribution to GDP stood at  3.3%, 
and despite a fall of 0.9% in 2016, it is expected to rise by 2.9% per year to attain 3.7% of GDP in 
2026. During the review period , Brazil hosted six mega events, i.e. the United Nations Conference 
on Environm ent and Development (Rio+20), World Youth Day, Confederation s Cup, 2014 FIFA 
World Cup , and 2016 Olympic and Paralympic Games, which  required a major investment in 
tourism, infrastructure, and security. Total revenue from international tourists amounted to  
US$6.8 billion in 2014, an increase of 2% over 2013, which was a new record for the country, but 
in 2015 it dropped to US$5.8 billion . In 2015, the main source markets were Argentina (33%), the 
United States (9.1%), Chile (4.9%), Paraguay (4.8%), Uruguay (4.2%) , and France (4.1%).339 All 
hotels are privately  owned and there is foreign participation in hotel management activities.  
4.206.   The National Council of Tourism (CNT) remains responsible for bringing together 
government and non -government stakeholders to joi ntly establish the strategic direction for 
tourism in Brazil; its activities are coordinated by the Ministry of Tourism.340 Horizontal 
co-ordination at a sub -national level is led by the National Forum of State Tourism Ministers 
(FORNATUR) and the National A ssociation of Municipal Ministers and Directors of Tourism 
(ANSEDITUR). The Brazilian Tourist Board (Embratur), a federal state -owned agency reporting to 
the Ministry of Tourism works exclusively on the promotion, marketing and support of the trading 
of Brazil's tourism  services, products and destinations abroad.  
4.207.   During the review period , the National Tourism Plan 2013 -2016 set four priorities: prepare 
Brazil tourism for mega events; increase the generation of foreign currency receipts and visits by 
interna tional tourists; encourage Brazilians to travel within Brazil; and, improve the quality and 
increase the competitiveness of Brazilian tourism.341 Priority actions covered a wide range of topics 
in the areas of infrastructure, financing and capitali zation of the sector, technical and managerial 
training, fiscal/tax treatment, technological innovation, domestic and international promotion, 
certification, registration, development of micro and small enterprises in the tourism sector and 
development of tourist de stinations, among others. The objectives set in the 2016 -2019 Multi -Year 
Plan are: to promote Brazilian destinations, products and services in Brazil and abroad; and, to 
increase the competitiveness of touris m destinations, products and services. Priority action for 
attaining these objectives includes: the modernization of Embratur's management model; the 
reallocation of 15.75% of social contribution funds to finance the promotion  of tourist destinations; 
the legalization of resorts' casinos; the unilateral  exemption from tourism visas for strategic tourist 
markets and low -risk migrants; the introduction of incentives for theme parks (such as import tax 
exemption on equipment with no national substitutes); the reduction of IPI taxes on industrialized 
product s; increasing air connectivity; and resizing the Brazilian Tourism Map.  
4.208.   The main regulatory framework governing tourism remains virtually unchanged.342 In 
2015, a visa waiver for foreign tourists during the Olympics and Paralympics, and some budgetary 
laws guarant eeing  resources for promoting the host cities and the main tourist attractions in the 
country , were enacted.343 In the same year , the right to accessibility was extended and , inter alia , 
                                                
337 World Travel & Tourism Council (2016), Travel & Tourism - ECONOMIC IMPACT 2016 BRAZIL . Viewe d 
at: http://www.wttc.org/ -/media/files/reports/economic -impact -research/countries -2016/brazil2016.pdf ; 
Ministério do Turismo (2015), Índice de  Competitividade do Turismo Nacional - Relatório Brasil 2015 . Viewed at 
http://www.turismo.gov.br/sites/default/turi smo/o_ministerio/publicacoes/downloads_publicacoes/Relatorio_Br
asil_2015_WEB.pdf . 
338 World Travel & Tourism Council online information. Viewed at http://www.wttc.org/ -
/media/files/reports/benchmark -reports/country -reports -2015/brazil --benchmarking -report -2015.pdf . 
339 OECD (2016), OECD Tourism Trends and Policies 2016 , 9 March. Viewed at: http://www.oecd -
ilibrary.org/industry -and-services/oecd -tourism -trends -and-policies -2016_tour -2016-en. 
340 OECD (2016), OECD Tourism Trends and Policies 2016 , 9 March. Viewed at: http://www.oecd -
ilibrary.org/industry -and-services/oecd -tourism -trends -and-policies -2016_tour -2016-en. 
341 OECD (2016), OECD Tourism Trends and Policies 2016 , 9 March. Viewed at: http://www.oecd -
ilibrary.org/industry -and-services/oecd -tourism -trends -and-policies -2016_tour -2016-en. 
342 It mainly consists of the Brazilian Tourism Act (Law No. 11.771 of 17 September 2008) and the Law 
of Special Areas and Places of Tourist Interest (Law No. 6.513 of 20 December 1997).  
343 Law 13,193/2015.  WT/TPR/S/358 • Brazil  
 
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  established  a requirement that hotels, inns and similar establis hments must offer at least 10% of 
their rooms as dormitories accessible by handicapped people.344 The revision of the Brazilian 
Tourism Act is under consideration.  
4.209.   In addition to tax incentives available to all business activities ( Section  3.3.1), Brazil 
continued to provide ten tourism -specific financing programmes  to cope with the high demand 
from the mega events hosted during the review period.345 These programmes , which provide 
concessional or administered interest rate loans to investors, are: FUNGETUR – General Tourism 
Fund; PROGER – Tourism Investment; FNE – Program me for Supporting Regional Tourism; FNO – 
Financing Program me for the Sustainable Development of the Amazon (Tourism); FCO 
Entrepreneurship – Credit Line; BNDES Automatic; BNDES FINEM – Enterp rise Financing; BNDES – 
Finame Machinery and Equipment; BNDES Card; and, Proger (as from May 2016) .346 FUNGETUR 
(managed by the Ministry of Tourism) and the constitutional financing funds (FNO, FNE, FCO) have 
tourism -specific credit lines , whereas the Worker s' Assistance Fund (FAT) has two general credit 
lines (Proger Urban Investment and Proger Urban Working Capital) that cover the activities of the 
sector. In 2015, concessional and administered interest rate loans supplied by state -owned banks 
stood at R$10 .9 trillion of which 55.2% were supplied by the Bank of Brazil, 32.6% by the Caixa 
Econômica Federal  Bank, 6% by the Bank of Nordeste, 3.6% by BNDES , and 2.5% by the Bank of 
Amazônia.347 Between January 2013 and September 2016 , the total amount disbursed for  tourism 
project finance stood at R$44.5 billion. In March 2016 , Brazil launched an online platform called 
"Invest in Brazilian Tourism" to guide investors intending to invest in tourism.348  
4.210.   According to the OECD, Brazil's main challenges in this area inclu de market openness 
(e.g. the visa regime), safety , and business environment issues.349 To address them, it, inter alia, 
suggests the introduction of mechanisms to improve stability and reliability with regard to 
obtaining licences, permits, concessions , and other requirements for the installation and operation 
of tourism enterprises in Brazil.  
4.4.8   Professional services  
4.211.   Professional services remain a major component in Brazil's trade in services 
(Section  4.5.1). According to Siscoserv data, in 2014 the second mos t exported service and fourth 
most imported service was other professional, technical and management services , accounting for 
9.9% and 3.4% of the total services exports and imports respectively.350 In 2015, management 
and management consulting service s (11.5% of total) w ere the most exported service followed by 
other professional, technical and management services (9.9% of the total), and retained their 
position as the fourth most imported service (3.4% of the total).351 
4.212.   Under the Constitution, the Federal Gov ernment  has exclusive powers to regulate the 
practice of professions.352 Registration in professional associations is mandatory for the provision 
of certain services, such as legal, accounting, architectural, and engineering  services , and 
veterinary, dental and medical care. No professions are reserved for Brazilian nationals, but 
practice of the legal, medical, health, and other professions requires residence in Brazil.353 
Nationals and foreign professionals with foreign qualifications (graduation diploma) mus t obtain 
revalidation of their degrees from a university recognized by the Ministry of Education, and meet 
                                                
344 Law 13, 146/2015.  
345 Ministry of Tourism online  information. Viewed at http://investimento.turismo.gov.br/en/2013 -10-
27-00-11-9.html . 
346 More information on these programmes is available online at the Ministry of Tourism  websi te. Viewed 
at: http://investimento.turismo.gov.br/2013 -10-27-00-11-8.html . 
347 Ministry of Tourism online data. Viewed at: 
http://www.dadosefatos.turismo.gov.br/dadosefatos/home.html . 
348 Ministry of Tourism online information. Viewed at: http://investimento.turismo.gov.br/ . 
349 OECD (2016), OECD Tourism Trends an d Policies 2016 , 9 March. Viewed at: http://www.oecd -
ilibrary.org/industry -and-services/oecd -tourism -trends -and-policies -2016_tour -2016-en. 
350 The services are registered on Siscoserv according to the Brazilian Nomenclature of Services and 
Intangibles (NBS). "Other professional, technical and management services" are code number 1.1409 of NBS. 
Online data ( http://www.mdic.gov.br/comercio -servicos/estatisticas -do-comercio -exterior -de-servicos/416 -
estatisticas -2014 ). 
351 MDIC online data. Viewed at: http://www.mdic.gov.br/comercio -servicos/estatisticas -do-comercio -
exterior -de-servicos/717 -estatisticas -do-comercio -exterio r-de-servicos -2015. 
352 Article 22 of the Constitution.  
353 Law No. 6.815 of 19 August 1980.  WT/TPR/S/358 • Brazil  
 
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  the requirements established by law to practise in Brazil. The National Education Council of the 
Ministry of Education  regulates the revalidation of foreign diploma, titles, and certificates.354  
4.213.   The request for revalidation must be submitted to a recognized Brazilian university.355 The 
revalidation process is facilitated if the university has an Equivalence or Reciprocity Cooperation 
Agreement with the fo reign university. In practice, procedures for revalidation of foreign diploma s 
are complex and time consuming.356 Brazil does not have any agreement s for automatic 
recognition of qualifications other than with Portugal; therefore, the rules are the same for all 
countries , except Portugal .357 Furthermore, diploma s and transcripts must be legalized in the 
Brazilian consulates where the studies were conducted. Foreign professionals with a work contract 
are subject to the same legal labour requirements as locals.  
4.214.   Under MERCOSUR Decision No. 25/2003 , a regulatory framework allows for granting 
temporary work permit s to service providers in member countries.358 During the review period, 
some Brazilian professional associations issued regulations for granting temporary li cences, for 
instance, for architectural, urban planning, engineering, geology and agronomy professionals.359 
However, applicant s must have  a temporary work contract and a resident visa, either permanent 
or temporary , enabling them to apply for a temporary pr ofessional licence.360  
4.4.8.1   Legal services   
4.215.   The regulatory framework governing legal services remains unchanged.361 The Brazilian 
Bar Association (OAB) continues to regulate and set the standards of conduct and qualifications for 
the legal profession at the federa l level, and has exclusive authority to admit and discipline 
attorneys. Only lawyers registered with the OAB may receive the title of attorney and perform 
legal activities in Brazilian law. Anyone possessing a foreign law degree may be admitted to 
practi se law in Brazil as an attorney , provided the law degree is validated at a recognized Brazilian 
law school, and the applicant passes the OAB Bar exam, and registers with the OAB. An attorney's 
main registration must be at the sectional council of the federat ive unit where he/she intends to 
establish professional domicile. The licence to practi se law as an attorney is valid for an indefinite 
term and attorneys are allowed to practice Brazilian law. Brazilian law firms are organized as 
limited liability entitie s, with unlimited liability of the partners with respect to losses attributed to 
the practice of law. The association of lawyers with non -lawyers is prohibited.  
4.216.   Foreign -qualified lawyers may also practice in Brazil as foreign law consultants. A foreign 
lawyer may establish a consultancy in foreign law in Brazil.362 In this case, the foreign lawyer is 
not required to validate the law degree or to pass the Bar exam. However, OAB authorization and 
registration for legal consultancy services are required and are  granted for renewable periods of 
three years. Requirements for obtaining a licence to practi se as a foreign law consultant include 
proof of a legal instrument granting reciprocal treatment to Brazilian attorneys in the applicant's 
country of origin. Forei gn law consultants are forbidden from offering consultancy services or 
counselling in Brazilian law and from exercising as an attorney -at-law. They are only allowed to 
provide consultancy on the foreign law of the country where they are licensed to practis e law. 
Brazil maintains a Registry of Foreign Law Consultants.363  
4.217.   A consultancy firm providing foreign law services must be constituted and registered in 
Brazil, and all its lawyers must be authorized by the OAB. A foreign law consultancy firm cannot 
                                                
354 Resolution No. 1 of 28 January 2002, as modified by Resolution No. 8 of 4 October 2007.  
355 The list of required documents and procedures (in Portuguese) are availabl e at Ministry of Education. 
Viewed at: http://portal.mec.gov.br/index.php?optio n=com_content&view=article&id=12405:revalidacao -de-
diploma -graducao&catid=322:revalidacao -de-diploma -graduacao&Itemid=317 . 
356 WTO document WT/TPR/S/283/Rev.1, 26 July 2013.  
357 Ministry of Education online information. Viewed at: http://portal.mec.gov.br/revalidacao -de-
diplomas -sp-1481178155 . 
358 The National Education Council Resolution No. 106 of 2007 provides for the implementation of 
Decision No. 25/2003 in Brazil.  
359 Brazilian Re gional Council of Engineering and Architecture (CREA) online information. Viewed at: 
http://www.creasp.org.br/profissionais/procedimentos /registro_temp_profissional_diplomado_exterior_2013 . 
360 Law No. 6.815 of 19 August 1980.  
361 Law No. 8,906 of 4 July 1994 (as amended).  
362 Provision No. 91 of 13 March 2000.  
363 Provision No.  99 of 2002.  WT/TPR/S/358 • Brazil  
 
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  enter into partnership with a Brazilian attorney practi sing Brazilian law or hire Brazilian lawyers 
unless employed as foreign law consultants.364  
4.4.8.2   Accounting and auditing services  
4.218.   According to the Federal Accounting Council (CFC), there are currently 536,240 acco unting 
professionals registered in the country; no data on foreign accountants operating in Brazil are 
available.  
4.219.   The regulatory framework governing the accounting and auditing services remains 
unchanged. The profession remains regulated by the Federal Acc ounting Council (CFC), a special 
corporative body of public law, which remains, inter alia , responsible for compiling and updating 
the Brazilian Rules of Accountancy.365 The CFC  comprises one rep resentative from each of the 
27 Regional Accounting Councils (C RCs) which are responsible for implementing the CFC Directives 
and for the registration and supervision of accountants in their respective jurisdictions.  
4.220.   Similar to other professional services, persons holding an accountancy degree from a 
foreign universi ty are required to revalidate their diploma at a Brazilian public university and 
attend an accountancy graduation course to become acquainted with Brazilian accountancy 
standards. After passing a CFC Sufficiency Exam, professional registration with the loc al CRC is 
required.  
4.4.8.3   Architectural and urban planning services  
4.221.   As of January 2017 , there were 143,465 architects and urban planners registered at the 
Council of Architecture and Urbanism of Brazil (CAU/BR). Since 2013, 34,906 registrations were 
granted to professionals trained in Brazil and 136 to those from foreign institutions. There are 
currently 33,195 architecture and urban planning companies in Brazil; company registrations have 
been on the rise with 3,146 in 2013, 3,517 in 2014, 3,514 in 2015, and 2, 522 companies 
registered in 2016.   
4.222.   The regulatory framework governing architectural and urban planning services remains 
unchanged.366 However, since 2012 , regulations regarding professional registrations have 
improved to facilitate the process and data analy sis. The Council of Architecture and Urbanism of 
Brazil (CAU/BR) at the national level, and the Councils of Architecture and Urbanism (CAU/UF) in 
each of the federative states remain responsible for overseeing the exercise of these professions. 
Registratio n with the relevant CAU/UF is mandatory to exercise the profession of architect and 
urban planner, and is valid throughout the national territory.  
4.223.   Brazilian citizens and foreigners holding a permanent residence visa who have a university 
degree in archite cture and urban planning from an officially recognized foreign institution may 
obtain CAU registration provided they meet certain requirements.367 Their degree must be duly 
legalized by the competent Brazilian consulate and revalidated by an authorized insti tution in 
Brazil.368 Professionals must present identification documents valid in Brazil as well as education 
and experience credentials proving equivalence with the Brazilian curricula .  
4.224.   Fixed -term registration may be granted to Brazilian and foreign archit ects in possession of 
a foreign diploma and a fixed -term work contract in Brazil.369 In this case, validation of the foreign 
diploma is not required, but it must be issued by an officially recognized institution in the country 
of origin. The fixed -term regis tration is valid for the contract duration and only for the activities 
specified therein; proof of residency in Brazil is required.370 Exceptionally, foreign professionals 
with no permanent residency in Brazil may obtain fixed -term registration, provided the y are 
                                                
364 More information about the relevant procedures is avail able at WTO document WT/TPR/S/283/Rev.1, 
26 July 2013.  
365 Decree -Law No. 9,295 of 27 May 1946. CFC online information. Viewed at: 
http://www.cfc.org.br/conteudo.aspx?codMenu=1 . 
366 Law No. 12,378 o f 31 December 2010.  
367 CAU Resolution No. 18 of 2 March 2012.  
368 CAU Resolution No. 26 of 6 June 2012.  
369 CAU Resolution No. 35 of 6 October 2012.  
370 CAU Resolution No. 26 of 6 June 2012.  WT/TPR/S/358 • Brazil  
 
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  accompanied in all their professional activities by a registered Brazilian architect or architect 
association with residence in  Brazil.371  
4.225.   During the review period , three cooperation agreements entered in to force. Since 
1 January  2014, a registration facilitation agreement  between Brazil and Portugal , which is aimed 
at promoting the bilateral exchange of knowledge and cooperation , as well as reciprocity in 
registration conditions , has allowed for registration of Brazilian and Portuguese architects and 
urban planners in the other country's register (the Brazilian Council of Architecture and Urbanism 
(CAU/BR) or the Order of Architects (OA/PT) of Portugal)  upon fulfilment of the following 
requirements: holding a definitive registration in their respective  country; Brazilian professionals 
having at least one year of registration at CAU and Portuguese Professionals having completed a 
year of compulsory internship; and, registration at the Register of Individual Taxpayers (CPF) in 
Brazil for the members of OA  or a Tax Identification Number (TIN) in Portugal for those enrolled in 
the CAU/BR.372 The agreement applies only to native or naturalized Brazilian and Portuguese  
persons . For definitive registration, the professional must prove residence in the host countr y and 
present the diploma revalidated by the competent authority. According to CAU/BR, at present 
there are 8 Brazilian architects registered in OA/PT while there are 20 Portuguese professionals in 
Brazil holding definitive registration and 6 holding a fix ed-term registration. A  mutual recognition 
agreement negotiated between the Federal Council of Engineering of Brazil and Portugal's Order of 
Engineers entered into force in 2015 , and a Memorandum of Understanding between CAU/BR and 
the Conseil National de l'Ordre des Architectes of France was signed in 2016. CAU/BR also 
maintains MoUs with other foreign architectural councils, i.e. the United States (NCARB and AIA), 
the United Kingdom, Spain, Costa Rica, Angola, and Ca bo Verde. The signing of MoUs with 
Colombia, Mexico and Peru is to take place in the course of 2017.  
4.4.8.4   Medical services  
4.226.   In response to much -needed capital injection, in 2015 , healthcare services were opened to 
foreign investment ( Section  2.7). During the review period , the main regulatory framew ork 
governing medical services remain ed unchanged , although legislation was passed to implement 
the 2013 More Doctors ( Mais Médicos)  Program me aimed at attracting doctors for the National 
Public Health Services (SUS) (see below).373 Concerning doctors operat ing outside the 2013 
Program me, the requirements for all Brazilians or foreigners who obtained the diploma abroad 
remain unchanged and involve the diploma's revalidation under the simplified National 
Examination of Revalidation of Medical Diplomas issued b y Foreign Higher Education Institutions 
(Revalida), a permanent visa, enrolment in the Regional Medical Council (CRM) , and a certificate of 
proficiency in Portuguese.374  
4.227.   The 2013 More Doctors Program me has allowed foreign doctors holding  a medical school 
diploma from abroad to work in Brazil without meeting the standard working requirements 
established  by the legislation.375 These doctors do not receive a CRM licence as required for other 
professionals wi shing  to pursue a medical career in Brazil; they are onl y registered with the 
Ministry of Health without being required to revalidate the diploma and register at CRM. They 
receive payments in  the form of scholarships and allowances and their payment terms are set 
jointly by the Ministers of State for Education and Health; their monthly payments were increased 
from R$10,570 per physician to R$11,520 in 2017, and the monthly housing and food aid to those 
located in indigenous areas were subject to a 10% adjustment – from R$2,500 to R$2,750 – as 
of August  2016.376 To facilitate the large -scale participation of Cuban doctors in the More Doctors 
Program me, in 2013 , Brazil signed a three -year South -South cooperation agreement with the 
Pan-American Health Organization (PAHO) that was renewed for another period of three ye ars.377 
                                                
371 Article 6 of Law No. 12,378 of 31 December 2010.  
372 CAU online informat ion. Viewed at: http://www.caubr.gov.br/acordo -entre -brasil -e-portugal -permite -
que-arquitetos -trabalhem -nos-dois-paises/ . 
373 Decree No. 44.045 of 19 June 1958 and Law No. 12.871 of 22 October 2013.  
374 The National Institute of Studies and Educational Research Anísio Teixeira (Inep) ensures the 
implementation of Revalida.  
375 Law No. 12.871 of 22 October 2013.  
376 Online Ministry of Health infor mation ( http://www.brasil.gov.br/saude/2016/09/governo -reajusta -
salarios -do-mais-medicos -para-r-11-520 ). 
377 PAHO facilitates the selection, trans portation and integration of Cuban doctors into basic healthcare 
teams and has already designated 11,429 Cuban doctors to specific communities. United Nations Office for 
South -South Co -operation (2016), Good Practices in South -South and Triangular Co -opera tion for Sustainable WT/TPR/S/358 • Brazil  
 
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  On the other hand, t he Ministry of Health strengthened the participation of Brazilian physicians in 
the Program me; between December  2016 and April 2017, about 2,000 vacancies were  planned  to 
be offered to Brazilian professionals. The Program me expand ed primary care by bringing doctors 
to regions with a shortage of professionals; in March 2017 , it operated with 18,240 physicians 
(52.5% Cubans) in 4,058  municipalities and 34 Indigenous Special Health Districts (DSEI) , 
providing assistance to about 63 mi llion people.  
 
                                                                                                                                                  
Development , May. Viewed at: https://undg.org/wp -content/uploads/2016/06/Good -Practices -in-South -South -
and-Triangular -Cooperation -for-Sustainable -Development -May-2016.pdf ; Ministry of Health online information. 
Viewed at: http://www.brasil.gov.br/saude/2016/09/governo -reajusta -salarios -do-mais-medicos -para-r-11-
520. WT/TPR/S/358 • Brazil  
 
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  5  APPENDIX TABLES  
Table A1. 1 Merchandise exports , by group of products, 2012 -16 
  2012  2013  2014  2015  2016  
Total exports (US$ billion)  242.6  242.2  225.1  191.1  185.2  
 % of total exports  
Total primary products  62.7 61.7 63.4 60.9 59.2 
Agriculture  35.6 37.4 39.1 41.9 41.5 
Food 31.8 33.9 35.0 37.1 36.7 
2222 - Soya beans  7.1 9.4 10.3 11.0 10.4 
0611 - Sugars, beet or cane, raw, in solid form, not containing 
added flavouring or colouring matter  4.1 3.8 3.3 3.1 4.5 
0123 - Meat and edible offal of the poultry of subgroup  001.4, 
fresh, chilled or frozen  2.9 3.0 3.1 3.3 3.3 
0813 - Oilcake and other solid residues (except dregs)  2.7 2.8 3.1 3.0 2.8 
0711 - Coffee, not roasted, whether or not decaffeinated; coffee 
husks  and skins  2.4 1.9 2.7 2.9 2.6 
0449 - Maize (not including sweet corn), unmilled other than seed  2.2 2.6 1.7 2.6 2.0 
0112 -  Meat of bovine animals, frozen  1.5 1.9 2.2 2.1 1.9 
0612 - Other beet or cane sugar and chemically pure sucrose, in 
solid form  1.2 1.1 0.9 0.9 1.2 
Agricultural raw material  3.8 3.5 4.0 4.7 4.8 
2515 - Chemical wood pulp, soda or sulphate, other than 
dissolving grades, semi -bleached or bleached  1.8 2.0 2.2 2.8 2.8 
Mining  27.0 24.2 24.4 19.1 17.7 
Ores and other minerals  15.1 15.8 14.2 10.7 10.3 
2815 - Iron ore and concentrates, not agglomerated  9.8 10.7 8.9 5.4 6.2 
2852 - Alumina (aluminium oxide), other than artificial corundum  0.8 0.7 1.0 1.3 1.2 
Non-ferrous metals  1.0 1.1 1.0 1.2 1.1 
Fuels 10.9 7.4 9.2 7.2 6.3 
3330 - Petrole um oils and oils obtained from bituminous minerals, 
crude  8.4 5.4 7.3 6.2 5.4 
334 - Petroleum oils and oils obtained from bituminous minerals, 
other than crude  2.2 1.9 1.7 0.9 0.6 
Manufactures  33.8 35.1 33.3 36.1 37.9 
Iron and steel  4.6 3.7 4.8 5.1 4.4 
6715 - Other ferro -alloys (excluding radioactive ferro -alloys)  1.1 1.0 1.2 1.2 1.1 
Chemicals  6.2 5.9 5.9 6.0 5.9 
Other semi -manufactures  5.0 5.1 5.7 6.2 6.2 
Machinery and transport equipment  15.8 18.3 14.7 16.4 18.8 
Power generating machines  0.9 1.2 1.5 1.8 2.0 
7149 - Parts of the engines and motors of heading 714.41 and 
subgroup 714.8  0.0 0.3 0.7 1.0 1.3 
Other non -electrical machinery  4.3 3.6 3.8 3.8 3.9 
Agricultural machinery and tractors  0.5 0.5 0.5 0.4 0.4 
Office machines & telecommunication eq uipment  0.6 0.5 0.4 0.5 0.4 
Other electrical machines  0.8 0.9 0.9 0.9 0.9 
Automotive products  5.4 5.9 4.4 5.2 6.0 
7812 - Motor vehicles for the transport of persons, n.e.s.  1.5 2.3 1.4 1.8 2.5 
7821 - Motor vehicles for the transport of goods  0.9 0.9 0.7 0.9 1.1 
Other transport equipment  3.8 6.1 3.7 4.3 5.6 
7935 - Light vessels, fire -floats, dredgers, floating cranes, and 
other vessels the navigability of which is subsidiary to their main 
function; floating docks; floating or submersible drilling or 
production platforms  0.6 3.2 0.9 1.0 2.0 
7924 - Aeroplanes and other aircraft, mechanically -propelled 
(other than helicopters), of an unladen weight exceeding 
15,000  kg 1.5 1.2 1.2 1.6 1.8 
Textiles  0.4 0.4 0.4 0.5 0.4 
Clothing  0.1 0.1 0.1 0.1 0.1 
Other c onsumer goods  1.8 1.7 1.8 1.9 2.0 
Other  3.6 3.2 3.3 3.0 2.9 
9710 - Gold, non -monetary (excluding gold ores and concentrates)  1.1 1.1 1.0 1.2 1.6 
Source:  UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/358 • Brazil  
 
- 165 - 
 
  Table A1. 2 Merchandise imports by  group of products, 2012 -16 
  2012  2013  2014  2015  2016  
Total imports (US$ billion)  223.1  239.6  229.1  171.4  137.6  
 % of total imports  
Total primary products  26.8 27.7 28.4 24.1 22.8 
Agriculture  5.9 5.9 5.9 6.2 8.7 
Food 4.8 4.9 4.9 5.1 7.4 
0412 - Other wheat (including spelt) and meslin, unmilled  0.8 1.0 0.8 0.7 1.0 
Agricultural raw material  1.1 1.0 1.0 1.1 1.3 
Mining  20.9 21.7 22.5 17.9 14.1 
Ores and other minerals  0.9 1.0 1.0 1.3 1.2 
Non-ferrous metals  2.0 1.7 1.8 2.1 2.0 
Fuels 18.0 19.1 19.7 14.5 11.0 
334 - Petroleum oils and oils obtained from bituminous minerals, 
other than crude  7.3 7.4 7.7 5.0 5.3 
3330 - Petroleum oils and oils obtained from bituminous minerals, 
crude  6.0 6.8 6.8 4.3 2.1 
3212 - Other coal  1.3 0.9 0.9 1.1 1.2 
          3432 - Natural gas, in the gaseous state  1.5 1.6 1.7 1.5 0.9 
Manufactures  73.1 72.3 71.6 75.9 77.1 
Iron and steel  2.2 2.0 2.0 2.1 1.4 
Chemicals  18.9 18.9 19.7 22.1 24.7 
5416 - Glycosides; glands or other organs and their extracts; 
antisera, vaccines and similar products  1.3 1.4 1.5 1.7 2.0 
5429 - Medicaments, n.e.s.  1.2 1.2 1.2 1.5 1.9 
5157 - Other heterocyclic compounds; nucleic acids  1.1 1.1 1.1 1.4 1.8 
5629 - Fertilizers, n.e.s.  1.0 1.1 1.2 1.2 1.5 
5623 - Mineral or chemical fertilizers, potass ic (other than crude 
natural potassium salts)  1.6 1.4 1.3 1.5 1.5 
5621 - Mineral or chemical fertilizers, nitrogenous  1.0 0.9 1.0 0.9 1.2 
5911 - Insecticides put up in forms or packings for retail sale or as 
preparations or articles  0.5 0.6 0.8 0.8 0.7 
Other semi -manufactures  5.1 5.1 4.9 4.8 4.5 
Machinery and transport equipment  38.4 38.0 36.4 37.4 37.3 
Power generating machines  2.3 2.3 2.1 2.7 3.2 
7149 - Parts of the engines and motors of heading 714.41 and 
subgroup 714.8  0.6 0.6 0.8 1.2 1.6 
Other n on-electrical machinery  10.2 10.0 9.2 9.3 9.8 
7284 - Machinery and mechanical appliances specialized for 
particular industries, n.e.s.  0.8 0.9 0.8 0.8 0.8 
Agricultural machinery and tractors  0.4 0.3 0.3 0.2 0.2 
Office machines & telecommunication equipm ent 9.0 8.8 9.0 8.6 8.7 
7649 - Parts and accessories suitable for use solely or principally 
with the apparatus of division 76  2.5 2.8 3.0 2.9 2.6 
7764 - Electronic integrated circuits and micro -assemblies  1.9 2.0 2.0 1.8 2.1 
Other electrical machines  4.1 4.1 4.1 4.4 4.5 
Automotive products  9.7 9.8 8.9 8.3 7.8 
7843 - Other parts and accessories of the motor vehicles of groups 
722, 781, 782 and 783  3.0 3.5 3.1 3.1 3.5 
7812 - Motor vehicles for the transport of persons, n.e.s.  4.3 3.8 3.4 2.9 2.1 
7821 - Motor vehicles for the transport of goods  1.3 1.4 1.3 1.2 1.1 
Other transport equipment  3.1 3.0 3.1 4.0 3.3 
7929 - Parts, n.e.s. (not including tyres, engines and electrical 
parts), of the goods of group 792  0.6 0.6 0.6 0.7 0.9 
Textiles  1.9 1.8 1.9 1.9 2.0 
Clothing  1.1 1.2 1.3 1.6 1.1 
Other consumer goods  5.4 5.4 5.4 6.0 6.0 
Other  0.1 0.0 0.0 0.1 0.1 
Source:  UNSD, Comtrade database (SITC Rev.3).  WT/TPR/S/358 • Brazil  
 
- 166 - 
 
  Table A1. 3 Merchandise exports by destination, 2012 -16 
  2012  2013  2014  2015  2016  
Total exports (US$ billion)  242.6  242.2  225.1  191.1  185.2  
 % of total exports  
Americas  33.2 33.6 33.6 34.4 34.0 
United States  11.1 10.3 12.1 12.7 12.6 
MERCOSUR  11.5 12.2 11.1 11.0 10.6 
Argentina  7.4 8.1 6.3 6.7 7.2 
Uruguay  0.9 0.9 1.3 1.4 1.5 
Paraguay  1.1 1.2 1.4 1.3 1.2 
Venezuela, Bolivarian Republic of  2.1 2.0 2.1 1.6 0.7 
Other America  10.6 11.1 10.4 10.7 10.8 
Chile 1.9 1.9 2.2 2.1 2.2 
Mexico  1.7 1.7 1.6 1.9 2.1 
Canada  1.3 1.1 1.0 1.2 1.3 
Colombia  1.2 1.1 1.1 1.1 1.2 
Europe  22.0 21.6 20.8 20.1 20.2 
EU-28 20.3 19.7 18.7 17.8 18.0 
Netherlands  6.2 7.2 5.8 5.3 5.6 
Germany  3.0 2.7 2.9 2.7 2.6 
Italy 1.9 1.7 1.8 1.7 1.8 
Belgium  1.5 1.5 1.5 1.6 1.7 
United Kingdom  1.9 1.7 1.7 1.5 1.5 
Spain  1.5 1.5 1.5 1.6 1.4 
France  1.7 1.4 1.3 1.2 1.3 
EFTA 1.2 1.4 1.5 1.5 1.3 
Other Europe  0.5 0.5 0.6 0.8 0.8 
Commonwealth of Independent States (CIS)  1.8 1.7 2.0 1.5 1.5 
Russian Federation  1.3 1.2 1.7 1.3 1.2 
Africa  5.0 4.6 4.3 4.3 4.2 
Middle East  4.8 4.5 4.6 5.2 5.5 
Saudi Arabia, Kingdom of  1.2 1.2 1.1 1.4 1.3 
United Arab Emirates  1.0 1.1 1.3 1.3 1.2 
Asia 31.3 32.3 32.9 33.3 33.7 
China  17.0 19.0 18.0 18.6 19.0 
Japan  3.3 3.3 3.0 2.5 2.5 
Other Asia  11.0 10.0 11.9 12.1 12.2 
India 2.3 1.3 2.1 1.9 1.7 
Korea, Republic of  1.9 1.9 1.7 1.6 1.6 
Singap ore 1.2 0.8 1.5 1.1 1.5 
Hong Kong, China  1.0 1.4 1.5 1.1 1.2 
Other  2.0 1.7 1.8 1.3 0.9 
Source:  UNSD, Comtrade database.  WT/TPR/S/358 • Brazil  
 
- 167 - 
 
  Table A1. 4 Merchandise imports by origin, 2012 -16 
  2012  2013  2014  2015  2016  
Total imports (US$ billio n) 223.1  239.6  229.1  171.4  137.6  
 % of total imports  
Americas  33.3 33.4 33.0 32.9 35.3 
United States  14.6 15.1 15.4 15.6 17.5 
MERCOSUR  9.1 8.5 8.1 7.6 8.7 
Argentina  7.4 6.9 6.2 6.0 6.6 
Uruguay  0.8 0.7 0.8 0.7 0.9 
Paraguay  0.4 0.4 0.5 0.5 0.9 
Venezuela, Bolivarian Republic of  0.4 0.5 0.5 0.4 0.3 
Other America  9.7 9.7 9.5 9.7 9.0 
Mexico  2.7 2.4 2.3 2.6 2.6 
Chile 1.9 1.8 1.8 2.0 2.1 
Canada  1.4 1.3 1.2 1.4 1.4 
Bolivia, Plurinational State of  1.5 1.6 1.7 1.5 1.0 
Europe  23.5 23.3 22.5 23.6 24.7 
EU-28 21.4 21.2 20.4 21.4 22.6 
Germany  6.4 6.3 6.0 6.1 6.6 
Italy 2.8 2.8 2.8 2.7 2.7 
France  2.7 2.7 2.5 2.6 2.7 
Spain  1.6 1.9 1.7 2.0 1.9 
United Kingdom  1.6 1.5 1.4 1.6 1.7 
Netherlands  1.4 1.0 1.4 1.4 1.3 
Belgium  0.9 0.8 0.8 0.9 1.1 
EFTA 1.6 1.6 1.7 1.8 1.8 
Switzerland  1.2 1.2 1.2 1.4 1.4 
Other Europe  0.5 0.5 0.4 0.4 0.3 
Commonwealth of Independent States (CIS)  1.8 1.5 1.7 1.7 1.8 
Russian Federation  1.3 1.1 1.3 1.3 1.5 
Africa  6.4 7.3 7.4 5.1 3.3 
Algeria  1.4 1.3 1.3 1.1 1.2 
Middle East  3.3 3.1 3.5 3.1 2.6 
Asia 31.5 31.1 31.6 33.2 32.1 
China  15.3 15.6 16.3 17.9 17.0 
Japan  3.5 3.0 2.6 2.8 2.6 
Other Asia  12.7 12.6 12.7 12.4 12.5 
Korea, Republic of  4.1 4.0 3.7 3.2 4.0 
India 2.3 2.7 2.9 2.5 1.8 
Separate Customs Territory of Taiwan, Penghu, Kinmen and  
Matsu (Chinese Taipei ) 1.4 1.2 1.2 1.3 1.2 
Viet Nam  0.4 0.5 0.7 1.0 1.2 
Thailand  1.1 1.0 1.0 1.0 1.0 
Other  0.2 0.3 0.2 0.4 0.2 
Source: UNSD, Comtrade database.  WT/TPR/S/358 • Brazil  
 
- 168 - 
 
  Table A1. 5 Trade in services, 2012 -16 
  2012  2013  2014 2015  2016  
Total credit (US$ million)  38,816.3  38,010.5  39,965.3  33,777.5  33,300.3  
 % of total credit  
Transport  14.0 14.4 14.6 14.7 15.2 
Sea transport  11.7 11.8 11.5 11.8 11.3 
Air transport  1.8 2.0 2.6 2.3 3.0 
Other transport  0.5 0.6 0.6 0.6 0.9 
Travel 16.4 17.0 17.1 17.3 18.1 
Insurance and pension services  1.4 1.2 1.7 2.9 2.4 
Financial services  6.3 7.2 2.9 2.2 2.2 
Telecommunications, computer, and information services  1.9 1.9 3.6 4.7 5.4 
Charges for the use of intellectual property n.i.e.  0.7 1.0 0.9 1.7 2.0 
Operational leasing services  0.2 0.8 0.4 0.6 0.5 
Government services  4.5 4.4 2.3 2.3 2.2 
Oher business services, including architecture and engineering  46.9 44.9 53.0 51.2 48.8 
Personal, cultural, and recreational services  7.6 7.2 1.7 0.9 1.7 
Other  0.0 0.0 1.7 1.5 1.6 
Total debit (US$ million)  78,984.4  84,382.7  88,072.1  70,696.2  63,749.6  
 % of total debit  
Transport  17.5 17.6 16.5 15.0 13.8 
Sea transport  11.5 11.5 10.5 9.9 8.7 
Air transport  5.7 5.7 5.6 4.8 4.8 
Other transport  0.4 0.4 0.3 0.3 0.3 
Travel  27.9 29.7 29.0 24.6 22.7 
Insurance and pension services  1.9 1.8 1.6 1.9 2.1 
Financial services  2.1 1.7 1.1 1.4 1.4 
Telecommunications, computer, and information services  6.0 6.2 4.2 4.7 5.1 
Charges for the use of intellectual pro perty n.i.e.  5.3 5.4 6.7 7.4 8.1 
Operational leasing services  23.8 23.0 25.9 30.7 30.9 
Government services  4.0 3.9 2.4 2.6 3.6 
Oher business services, including architecture and engineering  11.1 10.3 9.7 10.0 10.7 
Personal, cultural, and recreational s ervices  0.3 0.4 2.5 1.4 1.3 
Other  0.0 0.1 0.3 0.3 0.3 
Source:  Central Bank of Brazil online information and data provided by the authorities.  
  
  WT/TPR/S/358 • Brazil  
 
- 169 - Table A2. 1 Notifications to the WTO, 1 January 2013 -4 April 2017  
Agreement  Descri ption  Periodicity  WTO document (last if recurrent)  
Agreement on Agriculture  
Articles 10 and 18.2 - ES:1 Export subsidies commitments  Annual  G/AG/N/BRA/42, 28/10/2016  
Articles 10 and 18.2 - ES:2 
Articles 10 and 18.2 - ES:3 
Article 18.2 - DS:1 Total aggregate measurement of support  Annual (or longer for developing and least -
developed Members)  G/AG/N/BRA/41, 27/10/2016  
Article 18.2 - MA:2  Market access - volume of imports under tariff and other 
quotas  Annual  G/AG/N/BRA/43, 28/10/2016  
Article 18.3 - DS:2 New or modified exempt domestic support measures  Ad hoc  G/AG/N/BRA/34, 26/01/2015  
G/AG/N/BRA/31, 18/11/2013  
General Agreement on Trade in Services (GATS)  
Article III:4 and/or Article IV:2  Contact and enquiry points  Once S/ENQ/78/Rev.15, 0 4/02/2015  
WT/L/847  Preferential treatment to services and service suppliers of 
LDCs Once; ad hoc for changes thereafter  S/C/N/839, 05/11/2015  
Agreement on the Implementation of Article VI of the GATT 1994  
Article 16.4  Anti-dumping actions (preliminary a nd final)  Ad hoc  Multiple notifications; from G/ADP/N/239, 
18/02/2013 to G/ADP/N/296, 24/02/2017  
Anti-dumping actions (taken within the preceding 6 months)  Semi-annual  G/ADP/N/294/BRA, 24/02/2017  
Article 18.5  Laws/regulations (and changes thereto, incl uding changes in 
the administration of such laws)  Once; ad hoc for changes thereafter  G/ADP/N/1/BRA/3, 20/09/2013  
GATT 1994  
Article XVII:4(a) - Understanding on 
the Interpretation of Article XVII  State trading activities  Annual (triennial full notificati on and annual 
changes)  G/STR/N/16/BRA, 09/08/2016  
Article XXVIII:5  Modification of schedules (reserve the right to modify 
schedules for a 3 -year period)  Triennial  G/MA/317, 18/12/2014  
Agreement on Import Licensing Procedures  
Article 1.4(a)  Sources in wh ich rules and information relevant to the 
Agreement are published and copies of publications  Once; ad hoc for changes thereafter  G/LIC/N/1/BRA/7, 31/08/2016  
G/LIC/N/1/BRA/6, 22/10/2014  
Article 8.2(b)  Changes in laws/regulations and administrative proc edures 
(first notification: full text of relevant legislation)  
Articles 5.1, 5.2, 5.3  Institution of import licensing procedures or changes thereto  Ad hoc  G/LIC/N/2/BRA/7, 31/08/2016  
G/LIC/N/2/BRA/6, 22/10/2014  
Article 7.3  Replies to Questionnaire on Import Licensing Procedures  Annual  G/LIC/N/3/BRA/11, 31/0872016  
Agreement on Subsidies and Countervailing Measures  
Article 25.1 and Article XVI:1 of the 
GATT  Subsidies  Annual (triennial full notification and annual 
changes)  G/SCM/N/253/BRA, 05/05/20 14 
Article 25.11  Countervailing duty actions (preliminary and final)  Ad hoc  G/SCM/N/316, 21/02/2017  
G/SCM/N/308, 25/08/2016  
G/SCM/N/287, 16/04/2015  
G/SCM/N/285, 23/02/2015  
G/SCM/N/279, 15/10/2014  
G/SCM/N/271, 10/04/2014  
G/SCM/N/268 , 17/01/2014  
G/SCM/N/262, 02/08/2013  
Countervailing duty actions (taken within the preceding 6 
months)  Semi-annual  G/SCM/N/313/BRA, 28/02/2017   
  WT/TPR/S/358 • Brazil  
 
- 170 - Agreement  Descri ption  Periodicity  WTO document (last if recurrent)  
Article 32.6  Laws/regulations (and changes thereto, including changes in 
the administration of such laws)  Once (at the date of entry into force of the WTO 
Agreement for existing laws and regulations); ad 
hoc (as and when a Member establishes such laws 
and regulations, or makes changes in existing 
laws and regulations or in the administration of 
such laws  G/SCM /N/1/BRA/2/Suppl.11, 18/09/2014  
G/SCM/N/1/BRA/2/Suppl.10, 08/05/2014  
G/SCM/N/1/BRA/2/Suppl.8, 20/09/2013  
G/SCM/N/1/BRA/2/Suppl.9, 20/09/2013  
Agreement on Safeguards  
Article 12.6  Laws/regulations and administrative arrangements (and 
changes thereto), or absence thereof  Once (promptly after the date of entry into force 
of the WTO Agreement); ad hoc (promptly after 
the establishment of such laws, regulations and 
administrative procedures, with updates as 
necessary to reflect modifications)  G/SG/N/1/BRA/3/Suppl.2, 18/09/2014  
Agreement on the Application of Sanitary and Phytosanitary Measures  
Article 7, Annex B  Sanitary/phytosanitary regulations  Ad hoc  Multiple notifications; from 
G/SPS/N/BRA/856, 03/01/2013 to 
G/SPS/N/BRA/1237, 23/03/2017  
Agreement on Technical Barriers to Trade  
Article 10.7  Bilateral and multilateral agreements; conformity 
assessment procedures; standards; technical regulations  Ad hoc  G/TBT/10.7/N/132, 01/07/2016  
G/TBT/10.7/N/131, 01/07/2016  
G/TBT/10.7/N/130, 30 /06/2016  
G/TBT/10.7/N/129, 30/06/2016  
Article 2.10  Technical regulations (urgent)  Ad hoc  G/TBT/N/BRA/692, 15/09/2016  
Article 2.9  Technical regulations  Ad hoc  Multiple notifications; from 
G/TBT/N/BRA/521, 11/01/2013 to 
G/TBT/N/BRA/708, 28/02/2017  
Articles 2.9 and 5.6  Technical regulations and conformity assessment procedures  Ad hoc  Multiple notifications; from 
G/TBT/N/BRA/508/Add.1, 20/03/2013 to 
G/TBT/N/BRA/678, 14/06/2016  
Article 5.6  Conformity assessment procedures  Ad hoc  Multiple notifications ; from 
G/TBT/N/BRA/522, 22/01/2013 to 
G/TBT/N/BRA/698, 11/11/2016  
Unspecified  Technical regulations  Ad hoc  G/TBT/N/BRA/635, 22/04/2015  
Trade Facilitation Agreement (WT/L/911)  
 Category A commitments  Once WT/PCTF/N/BRA/1, 29/07/2014  
Decision on Notif ication Procedures for Quantitative Restrictions (G/L/59)  
 Quantitative restrictions (complete notification)  Biennial  G/MA/QR/N/BRA/1, 30/08/2016  
Source:  WTO Secretariat.  
 WT/TPR/S/358 • Brazil  
 
- 171 - 
 
  Table A3. 1 BNDES selected export finance programmes,  2017  
Activity/products targeted  Conditions  Rates/charges  
EXIM Pre -shipment (BNDES Circular No. 001/2017 of 6 January 2017)  
Finances production of Brazilian 
goods and services intended for 
export. Eligible products listed in 
Circular No.  006/2016, except  
NCM 87.03 (motor vehicles for less 
than 10  persons).  Financing granted for up to 36  months for 
capital goods and 24  months for all other 
products and services; the latter period is 
extended to 30 months for MSMEs.a 
Covers up to 70% of exports' value. To 
qualify automatically, goods must either 
meet an index of nationalizationb, be 
accredited under the BNDES FINAME 
schemec, or meet PPB criteria.d Interest rates for MSMEs: TJLPe 
or LIBOR. Interest rates for large 
firms: (30% of TJLP + 30% of 
TJFPEf or SELICg) or (100% of 
TJFPE or SELIC), depending on 
the product group. Plus BNDES 
spread (2.1% p.a.) and spread of 
the credit administrator.  
EXIM Pre -shipment "anchor" (BNDES Circular No. 002/2017 of 6 January 2017)  
Companies that carry out indirect 
exports (go ods and services 
produced by other companies). List 
of eligible products the same as for 
EXIM Pre -shipment (Circular 
No. 006/2016).  Financing period same as EXIM 
Pre-shipment. Covers up to 70% of 
exports' value. To qualify automatically, 
goods must either meet an index of 
nationalizationb, be accredited under the 
BNDES FINAME schemec, or meet PPB 
criteria.d Interest rates same as for 
EXIM Pre-shipment.  
EXIM Pre -shipment "Innovator" (BNDES Circular No. 003/2017 of 6 January 2017)  
Finances Brazilian -based "innovator" 
MSMEs that export own IT goods and 
services. "Innovator" status depends 
on various criteria.  Financing up to 70% of exports' value, 
granted for up to 36  months. To qualify 
automatically, goods must either meet an 
index of nationalizationb, be a ccredited 
under the BNDES FINAME schemec, or 
meet PPB criteria.d Interest rates: TJLP + BNDES 
spread (2.1%) + spread of the 
credit administrator.  
EXIM Automatic (BNDES Circular No. 009/2015 of 24 August 2015)  
Finances commercialization of 
Brazilian goods  abroad (at the post -
shipment phase) through a network 
of accredited banks in Latin America 
and Africa. Capital and consumer 
goods are eligible.  Financing up to 100% of exports' value, 
with a credit limit of US$10 million per 
application. Financing period : up to 
5 years.  Interest rates: LIBOR + BNDES 
spread (0.4% to 1.35% p.a., 
depending on the importing 
country's political risk) + spreads 
of the intermediary financial 
institutions in Brazil and 
overseas.  
EXIM Post -shipment (BNDES Circular No. 008/2015 of  27 July 2015 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 sa me as for EXIM 
Pre-shipment (Circular 
No. 006/2016). Eligible services 
include those associated with the 
export of qualified goods, as well as 
construction, engineering and aircraft 
maintenance and repair services.  Financing for up to 15 years, and 100% 
of the export value (85% for aircraft and 
related exports). To qualify automatically, 
goods must either meet an index of 
nationalizationb, be accredited under the 
BNDES FINAME schemec, or meet PPB 
criteria.d For construction and engineering 
services, percen tage of Brazilian -origin 
goods in total value of financed exports 
to be established by BNDES on a 
case-by-case basis. The exporter's 
administration and headquarters must be 
based in Brazil.  Interest/discount rates: (LIBOR, 
US Treasury Bonds, Euro Area 
Yield Curve, or EURIBOR) 
+ BNDES spread (at least 1.5% 
p.a.) + a risk premium. BNDES 
also levies a management fee 
(up to 1% of disbursed amount) 
and a commitment fee (up to 
0.5% p.a. on the unused credit 
balance). The intermediary bank 
levies an administration  fee (up 
to 1% of disbursed amount).  
a As from September 2016, the BNDES defines MSMEs as those whose annual gross operating 
revenue do es not exceed R$300 million. Previously, the threshold was R$90 million.  
b Index of nationalization: measure used by th e BNDES to determine the domestic content of a 
product. The index can be expressed in value or weight terms. For more details, see 
http://www.bndes.gov.br/wps/wcm/connect/site/2a2750df -1a44-46b7-92b1-
17dd83e4aee4/regulamento_credenciamento.pdf?MOD=AJPERES&CVID=lr.Xpz7&CVID=lr.Xpz7  
c In order to be accredited under FINAME, among other criteria,  goods must meet a nationalization 
index of at least 60% in weight or 50% in value (temporary reduction until 30  June 2017) terms.  
d PPB criteria are a set of pre -defined manufacturing steps that must take place in Brazil so that the 
product can benefit f rom tax incentives ( Section  3.3.1.1). 
e The TJLP is fixed by the Brazilian Monetary 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 the second quarter 
of 2017 was  7% p.a.  
f The pre -shipment fixed interest rate (TJFPE) is set quarterly by the BNDES to be applied to 
dollar -denominated export credits so as to reflect the BNDES external funding costs. The TJFPE rate 
between 16 January and 15 April 2017 was 4.544392 % p.a. 
g The SELIC rate is overnight rate set daily by the Central Bank of Brazil.  
Source:  Information provided by the Brazilian authorities.  WT/TPR/S/358 • Brazil  
 
- 172 - 
 
  Table A3. 2 Selected federal incentive schemes, 2017  
 Description  Beneficiaries  Total re venue 
forgone 2013 -16 
(R$ million)a 
Programme for Technological Development of the Semiconductor Industry (PADIS)  
 Zero-rated PIS, COFINS, and IPI on imported or 
locally purchased machinery, appliances, and 
equipment to be incorporated into fixed assets.  
Expiry date: 22  January 2022.  Semiconductor and display 
manufacturers that invest at 
least 5% of their gross domestic 
earnings in R&D.  341.3  
Programme for Technological Development of the Digital TV Equipment Industry (PATVD)  
 Zero-rated IPI, PIS, COFIN S, and CIDE on sales of 
transmitters, as well as on overseas payments for 
capital goods and for the use of technology or 
software. Expiry date: 22  January 2017.  Companies that invest in R&D 
and manufacture transmitters.  3.3 
Special Regime of Incentives fo r Infrastructure Development (REIDI)  
 Suspends PIS and COFINS on machinery and 
equipment acquired for incorporation as fixed 
assets in infrastructure works.  Builders of infrastructure 
facilities for transportation, 
energy (electricity and gas), 
basic sani tation, and irrigation.  9,100.0  
Special Tax Regime for the Defence Industry (RETID)  
 Suspends PIS, COFINS, and IPI on imports by 
RETID beneficiaries, and on domestic suppliers' 
sales to RETID beneficiaries.  Expiry date: 22  March 
2017.  Companies admitted  to RETID 
and their suppliers of inputs and 
services.  192.0  
Special Tax Regime for the Modernization and Expansion of Ports (REPORTO)  
 Acquisition of machinery and equipment is exempt 
from IPI, COFINS, PIS, and import duty (in case of 
goods without domes tic equivalent). Expiry date: 
31 December 2020.  Port operators, concessioners 
and users, as well as railroad 
concessioners and dredging 
companies.  812.0  
Special Regime for the Brazilian Aerospace Industry (RETAERO)  
 Suspends PIS and IPI on domestic sales  and 
imports of specific goods.  Companies that manufacture 
inputs or provide technology 
services to RETAERO 
beneficiaries in the production, 
modernization, maintenance or 
repair of aircraft.  1,265.0  
IT Capacity -Building and Competitiveness -Enhancement ( Lei da informática ) 
 Reduces IPI rates on IT goods manufactured 
according to a pre -defined PPB.  Computing, automation, 
telecommunications, 
microelectronics, software and 
technical services industries.  54.3 
Innovation Law  
 Halves IPI rates on relevant mac hinery, 
equipment, appliances and instruments. Zero -rates 
income tax (IR) on overseas payments to 
register/maintain IPRs. Allows various tax base 
reductions (deductible expenses, same -year 
depreciation, and accelerated amortization).  Companies investing in  
technology R&D  .. 
Digital Inclusion Programme  
 Exempts from PIS and COFINS the sales of digital 
goods (e.g. computers, tablets, smart phones, 
routers) produced according to a PPB. Expiry date: 
31 December  2018.  Brazilian retailers of specific 
digital g oods.  19,000 
.. Not available.  
a Annual federal budget projections.  
Source:  RENAI and  the RFB, Annual budget projections ( Demonstrativo dos Gastos Tributários, PLOA ). WT/TPR/S/358 • Brazil  
 
- 173 - 
 
  Table A4. 1 Domestic agricultural support notified to the WTO, 2014/15  
(US$ '000)  
Product -specific AMS  177,932.7  Below de minimis  level of 10%  
 Cocoa  1.7  Yes 
 Coffee  21,623.8  Yes 
 Edible beans  62,716.8  Yes 
 Grapes  3,850.9  Yes 
 Maize  68,125.0  Yes 
 Sugar cane  13,446.5  Yes 
 Wheat  8,168.0  Yes 
Non-produ ct-specific AMS  1,724,558.8   
 Non-product -specific production and marketing 
credit  726,770.0   
 Debt rescheduling programmes  941,506.6   
 Insurance programmes  56,282.2   
Total AMS  1,902,491.5   
Green box assistance  1,634,416.9   
 Research  82,149.4   
 Pest and disease control  16,032.5   
 Training services  4,700.3   
 Extension and advisory services  57,585.3   
 Inspection services  149.6   
 Marketing and promotion services  3,529.8   
 Infrastructural services  30,388.5   
 Agrarian organization  32,60 2.1   
 Public stockholding for food security purposes  123,564.3   
 Domestic food aid  1,165,817.7   
 Government agricultural insurance programme  177,897.6   
S&D assistance  1,312,521.7    
 Funds for variable input acquisitions  132,198.8   
 Funds for ag ricultural investments  1,152,817.2   
 Debt rescheduling programmes  27,505.7   
Total notified assistance  4,849,430.1   
Source:  WTO document G/AG/N/BRA/41, 27 October 2016.  
  
  WT/TPR/S/358 • Brazil  
 
- 174 - Table A4. 2 Brazil's air transport agreements and rel ated action, 2016  
Partner (signature)  Entry into 
force  Traffic 
rights 
(freedoms)  Cooperationa/ 
multiple 
designationb Pricing  Capacity  
Statistics  5th 
7th 
cabotage  
Cooperative 
arrangements  
Multiple 
designation  
Dual approval  
Dual 
disapproval  
Country of 
origin 
Zone pricing  
Free pricing  
Pre-
determination  
Free 
determination  
Other  
Withholding 
clause  
Albania (ASA signed on 04.11.2015)   x   x x     x  x  x x 
Angola (signed on 16.12.1993, new ASA negotiations 
initiated on 18.03.2009)  16.12.1983     x x   x     x x x 
Argentina (signed on 02.06.1948, new ASA 
negotiations initiated on 19.10.2006)  30.06.1967  x   x x   x     x x x 
Aruba (MoU signed on 23.06.2006, new ASA signed 
on 16.09.2014)   x   x x     x  x  x x 
Australia (signed on 21.04.2010, MoU signed on 
08.07.2008)   x   x x   x     x x x 
Austria (signed on 16.07.1993, MoU signed on 
15.11.1995)  10.10.1995  x   x x x       x x x 
Azerbaijan (negotiations initiated on 10.12.2012)      x x     x  x  x x 
Bahrain (negotiations initiated on 01.07.2010)   x   x x     x  x  x x 
Bahamas (signed on 07.12.2016)   x   x x     x  x  x x 
Barbados (signed on 26.04.2010, MoU signed on 
19.05.2005)   x    x x       x x x 
Belgium (signed on 04.10.2009, MoU signed on 
20.05.2008)  22.09.2011  x   x x   x     x x x 
Benin (ASA negot iations initiated and MoU signed on 
07.12.2016)      x x     x  x  x x 
Bolivia, Plurinational State of (signed on 02.06.1951, 
new MoU signed on 02.09.2004)  18.06.1954  x    x x       x x x 
Botswana (ASA negotiations initiated and MoU 
signed on 08.12.2016)   x   x x     x  x  x x 
Burkina Faso (ASA negotiations initiated and MoU 
signed on 18.04.2012)      x x     x  x  x x 
Cameroon (ASA negotiations initiated and MoU 
signed on 19.01.2006)   x    x   x     x x x 
Canada (signed on 15.05.86, new ASA negotiations  
initiated and MoU signed on 18.02.2011)  09.03.1990  x   x x     x  x  x x 
Cabo Verde (signed on 29.07.2004, MoU signed on 
05.09.13, new ASA signed on 31/10/2016)  13.03.2008  x   x x     x  x  x x  
  WT/TPR/S/358 • Brazil  
 
- 175 - Partner (signature)  Entry into 
force  Traffic 
rights 
(freedoms)  Cooperationa/ 
multiple 
designationb Pricing  Capacity  
Statistics  5th 
7th 
cabotage  
Cooperative 
arrangements  
Multiple 
designation  
Dual approval  
Dual 
disapproval  
Country of 
origin 
Zone pricing  
Free pricing  
Pre-
determination  
Free 
determination  
Other  
Withholding 
clause  
Chile (signed on 30.07.2009, MoU signed on 
13.05.2010)  11.01.2011  x   x x     x  x  x x 
China (signed on 11.07.1994, MoU signed on 
30.05.2006)  16.02.1998  x   x x   x     x x x 
Colombia (negotiations initiated on 28.05.2009, new 
ASA negotiations initiated and MoU signed on 
14.11.2011)  02.07.1975  x   x x   x     x x x 
Congo, Dem. Rep. of (ASA negotiations initiated and 
MoU signed on 10.12.13)   x   x x     x  x  x x 
Costa Rica (signed on 22.09.97, new ASA 
negotiations initiated and MoU signed on 22.02.11)   x   x x     x  x  x x 
Cuba (negotiations initiated on 27. 05.98, new ASA 
negotiations initiated and MoU signed on 
25.02.2011)  17.05.2000     x x     x   x x x 
Curaçao (negotiations initiated on 01.07.2011, new 
ASA signed on 03.12.2013, new MoU signed on 
20.05.2015)   x   x x     x  x  x x 
Dominican Republic (nego tiations initiated on 
07.08.2009, updated via exchange of 
correspondence in June 2011)   x   x x     x  x  x x 
Ecuador (ASA negotiations initiated and MoU signed 
on 19.04.2012, ASA signed on 02.05.2013)   x   x x     x  x  x x 
Egypt (negotiations initiated  on 24.06.2005, new 
MoU signed on 22.10.2015)   x   x x   x     x x x 
Ethiopia (negotiations initiated on 01.07.2010, ASA 
signed on 24.05.2013)   x   x x     x   x x x 
France (signed on 29.10.1965, new ASA negotiations 
initiated on 13.03.2008, updated via exchange of 
correspondence on June 2012)  19.02.1967  x   x x   x     x x x 
Germany (signed on 29.08.57, new ASA negotiations 
initiated on 23.11.2007)  15.08.1964  x   x x   x     x x x 
Ghana (ASA signed on 12.04.05, new MoU signed on 
29.06.2010)   x   x x     x   x x x 
Greece (ASA negotiations initiated and MoU signed 
on 18.03.1997)   x   x  x       x x x  
  WT/TPR/S/358 • Brazil  
 
- 176 - Partner (signature)  Entry into 
force  Traffic 
rights 
(freedoms)  Cooperationa/ 
multiple 
designationb Pricing  Capacity  
Statistics  5th 
7th 
cabotage  
Cooperative 
arrangements  
Multiple 
designation  
Dual approval  
Dual 
disapproval  
Country of 
origin 
Zone pricing  
Free pricing  
Pre-
determination  
Free 
determination  
Other  
Withholding 
clause  
Guatemala (ASA negotiations initiated and MoU 
signed on 08.11.2012)   x   x x     x  x  x x 
Guyana (signed on 10.05.1974, new ASA 
negotiations initiated a nd MoU signed on 
08.12.2016)  04.03.1975  x   x x     x  x  x x 
Guinea, Republic of (ASA negotiations initiated and 
MoU signed on 08.12.2016)      x x     x  x  x x 
Guinea -Bissau (MoU signed on 21.10.2015)      x x        x x x 
Hong Kong, China (signed on 0 6.09.1991, new ASA 
negotiations initiated and new MoU signed on 
22.10.2015)  04.07.1994  x   x x   x    x  x x 
Hungary (signed on 03.04.1997)  16.07.1999      x x       x x x 
Iceland (ASA negotiations initiated and MoU signed 
on 01.07.2010)   x   x x     x  x  x x 
India (signed on 10.09.06, new ASA negotiations 
initiated and MoU signed on 04.05.10)   x   x x     x   x x x 
Iraq (signed on 21.01.1977)  12.12.1979       x       x x x 
Israel (signed on 22.07.2009, new ASA negotiations 
initiated and MoU signed on 2 2.10.2015)   x   x x   x     x x x 
Italy (updated via exchange of correspondence in 
November 2010)  10.09.1952     x x     x   x x x 
Côte d'Ivoire (negotiations initiated on 07.08.1986, 
new ASA negotiations initiated and MoU signed on 
11.12.2013)      x x     x  x  x x 
Jamaica (MoU signed on 12.12.2013, ASA signed on 
13.02.2014)   x   x x     x  x  x x 
Japan (ASA signed on 14.12.1956, MoU signed on 
10.04.2014)  28.11.1962  x   x x   x     x x x 
Jordan (signed on 05.11.1975, new ASA negotiations 
initiated and MoU signed on 09.12.2012)  12.08.1976  x   x x     x  x  x x 
Lebanon (signed on 04.02.1997, MoU signed on 
08.02.1995)  23.04.1998  x    x x       x x x 
Kenya (ASA signed on 14.09.2010, new ASA 
negotiations initiated and MoU signed on 
10.09.2010)  06.06.2016  x   x x     x  x  x x  
  WT/TPR/S/358 • Brazil  
 
- 177 - Partner (signature)  Entry into 
force  Traffic 
rights 
(freedoms)  Cooperationa/ 
multiple 
designationb Pricing  Capacity  
Statistics  5th 
7th 
cabotage  
Cooperative 
arrangements  
Multiple 
designation  
Dual approval  
Dual 
disapproval  
Country of 
origin 
Zone pricing  
Free pricing  
Pre-
determination  
Free 
determination  
Other  
Withholding 
clause  
Korea, Rep. of (signed on 11.08.1992, new ASA 
negotiations initiated on 24.04.2009)  31.05.1995  x   x x     x  x  x x 
Kuwait (ASA negotiations initiated and MoU signed 
on 22.07.2010)   x   x x     x  x  x x 
Luxembourg (ASA negotiation s initiated and MoU 
signed on 28.08.2008)   x   x x   x     x x x 
Macao (signed on 15.07.1994)  08.02.1996  x   x x x       x x  
Malaysia (signed on 18.12.1995)  05.10.1998  x    x x       x x x 
Mauritius (MoU signed on 07.12.2016)      x x     x   x x x 
Mexico (signed on 26.05.1995, MoU signed on 
26.01.2011 and new ASA signed on 26.05.2015)  16.06.1996  x   x x   x    x  x x 
Morocco (new ASA negotiations initiated and MoU 
signed on 11.09.2009)  07.03.1979     x x   x     x x x 
Mozambique (ASA signed on 17.06.2 010, MoU 
signed on 04.06.2009)   x   x x   x     x x x 
Namibia (ASA negotiations initiated and MoU signed 
on 12.12.2013)   x   x x     x  x  x x 
Netherlands (signed on 06.07.1976, updated via 
exchange of correspondence in July 2011)  12.12.1977  x   x x x       x x x 
New Zealand (signed on 18.06.1996, MoU signed on 
12.12.2012 and new ASA signed on 11.03.2013)  29.10.1998  x   x x     x  x  x x 
Nigeria (signed on 06.09.2005, new MoU signed on 
08.12.2016)  25.09.2008     x x     x   x x x 
Oman (ASA negotiations initiated and MoU signed on 
01.07.2010)   x   x x     x  x  x x 
Panama (ASA signed on 25.05.2007, updated via 
exchange of correspondence in July 2014)  11.01.2010  x   x x     x  x  x x 
Paraguay (signed on 20.12.1952, new ASA signed on 
08.06.2016)  20.05.195 4 x   x x     x  x  x x 
Peru (signed on 11.12.2009, new MoU signed on 
15.08.2008)  21.08.1957  x   x x   x  x  x  x x 
Philippines (ASA negotiations initiated and MoU 
signed on 20.05.2013)   x   x x   x    x  x x 
Poland (signed on 13.03.2000, updated by exc hange 
of correspondence in April 2001)  14.11.2007     x x x       x x x  
  WT/TPR/S/358 • Brazil  
 
- 178 - Partner (signature)  Entry into 
force  Traffic 
rights 
(freedoms)  Cooperationa/ 
multiple 
designationb Pricing  Capacity  
Statistics  5th 
7th 
cabotage  
Cooperative 
arrangements  
Multiple 
designation  
Dual approval  
Dual 
disapproval  
Country of 
origin 
Zone pricing  
Free pricing  
Pre-
determination  
Free 
determination  
Other  
Withholding 
clause  
Portugal (signed on 11.11.2002, updated by 
exchange of correspondence in June 2012)  08.03.2007  x   x  x       x x x 
Qatar (negotiations initiated on 04.05.2006, MoU 
signed on 30.06.20 10)  x   x x     x  x  x x 
Russian Federation (signed on 22.01.1993, MoU 
signed on 14.02.2008 and new ASA negotiations 
initiated on 09.02.2011)  07.11.1995     x x     x   x x x 
Saudi Arabia (ASA signed on 14.04.2015)      x x     x   x x x 
Scandinavia (De nmark, Norway, and Sweden) 
(signed on 18.03.1969)  
- Denmark(updated via exchange of correspondence 
in December 2010)  
- Norway (MoU signed on 20.10.2015)  
- Sweden (updated via exchange of correspondence 
in December 2010)   
19.02.1970  
 
08.12.1969  x   x  x       x x x 
Senegal (ASA signed on 16.05.2007, MoU signed on 
28.04.2006)  06.11.2009  x   x x   x     x x x 
Serbia (ASA negotiations initiated and MoU signed on 
19.10.2015)      x x     x  x  x x 
Seychelles (MoU signed on 12.12.2013, ASA signed 
on 19.05.201 5)  x   x x     x  x  x x 
Sierra Leone (ASA negotiations initiated and MoU 
signed on 12.12.12)   x   x x     x  x  x x 
Singapore (signed on 25.11.2008, new ASA 
negotiations initiated on 27.06.2008, MoU signed on 
29.06.2010)  02.09.1999  x   x x     x  x  x x 
Saint Maarten (ASA negotiations initiated and MoU 
signed on 11.12.2013)   x   x x     x  x  x x 
South Africa (signed on 26.11.1996, MoU signed on 
27.05.2008)  17.10.2001  x   x x   x     x x x 
Spain (signed on 28.11.1949, new ASA negotiations 
initiated o n 13.07.2007, updated via exchange of 
correspondence on July 2010)  11.03.1954  x   x x   x     x x x 
Sri Lanka (ASA negotiations initiated and MoU signed 
on 08.08.2014)   x   x x     x  x  x x  
  WT/TPR/S/358 • Brazil  
 
- 179 - Partner (signature)  Entry into 
force  Traffic 
rights 
(freedoms)  Cooperationa/ 
multiple 
designationb Pricing  Capacity  
Statistics  5th 
7th 
cabotage  
Cooperative 
arrangements  
Multiple 
designation  
Dual approval  
Dual 
disapproval  
Country of 
origin 
Zone pricing  
Free pricing  
Pre-
determination  
Free 
determination  
Other  
Withholding 
clause  
Sudan (ASA negotiations initiated and MoU signed on 
10.12.2013)   x   x x     x  x  x x 
Suriname (signed on 28.01.1980, new ASA 
negotiations initiated and MoU signed on 
21.08.2009)  13.07.1983  x   x x   x  x  x  x x 
Switzerland (signed on 29.07.1998, new ASA signed 
on 08.07.2013)  02.01.2001  x   x x     x  x  x x 
Tanzania (negotiations initiated on 30.08.1989, new 
ASA negotiations initiated and MoU signed on 
10.12.2013)   x   x x     x  x  x x 
Thailand (signed on 21.03.1991)  22.06.1994  x     x       x x x 
Trinidad and Tobago (signed on 23.07.2008, MoU 
signed on 01.12. 2005)   x    x   x     x x x 
Togo (ASA negotiations initiated and MoU signed on 
12.12.2013)   x   x x     x  x  x x 
Turkey (signed on 21.09.1950, new ASA negotiations 
initiated on 11.05.2006, MoU signed on 19.10.2015)  29.03.1952  x   x x     x   x x x 
Ukraine (ASA signed 13.12.1996, new ASA 
negotiations initiated and MoU signed on 
02.12.2009, MoU signed on 19.02.2008)   x   x x   x     x x x 
United Arab Emirates (ASA negotiations initiated on 
09.06.2004, MoU signed on 30.06.2010)   x   x x     x  x  x x 
United Kingdom (signed on 31.10.1946, new ASA 
negotiations initiated on 22.10.2008, updated via 
exchange of correspondence in October 2010)  18.08.1950  x   x x     x   x x x 
United States (New ASA and MoU signed on 
19.03.2011)  07.02.1992  x   x x     x   x x x 
Uruguay (signed on 10.03.2009, MoU signed on 
11.07.2012)  11.01.2011  x   x x     x  x  x x 
Venezuela, Bolivarian Republic of (ASA signed on 
30.09.2008, MoU signed on 07.08.2008)  10.10.1991  x   x x   x     x x x 
Viet Nam (ASA negotiations initiated and M oU signed 
on 22.10.2015)      x x     x  x  x x 
Yemen (ASA negotiations initiated and MoU signed 
on 03.07.2013)   x   x x     x  x  x x  
  WT/TPR/S/358 • Brazil  
 
- 180 - Partner (signature)  Entry into 
force  Traffic 
rights 
(freedoms)  Cooperationa/ 
multiple 
designationb Pricing  Capacity  
Statistics  5th 
7th 
cabotage  
Cooperative 
arrangements  
Multiple 
designation  
Dual approval  
Dual 
disapproval  
Country of 
origin 
Zone pricing  
Free pricing  
Pre-
determination  
Free 
determination  
Other  
Withholding 
clause  
Zambia (ASA negotiations initiated and MoU signed 
on 10.12.2013   x   x x     x  x  x x 
Zimbabwe (ASA negotiations initi ated and MoU 
signed on 11.03.2010)   x   x x     x  x  x x 
a One party's airlines may sign code -share and other cooperation agreements with the other party's airlines and with third countries' 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.  
__________